Document of
The World Bank
FOROFFICIAL USEONLY
ReportNo: 37377-IN
PROJECT APPRAISAL DOCUMENT
ONA
PROPOSED CREDIT
INTHEAMOUNT OFSDR104.1MILLION
(US$154 MILLIONEQUIVALENT)
TO THE
REPUBLIC OF INDIA
FORTHE
PUNJAB RURALWATER SUPPLY AND SANITATION PROJECT
November 15,2006
SustainableDevelopment Unit
IndiaCountry ManagementUnit
SouthAsia Regional Office
This document has a restricted distribution and may be used by recipients only in the
performance o f their official duties. Its contents may not otherwise be disclosed without World
Bankauthorization.
CURRENCYEQUIVALENTS
(Exchange Rate Effective September 30,2006)
Currency Unit = Indian Rupees (INR)
US$1 = INR46.15
SDRl = US$1.4802
FISCAL YEAR
April 01 - March31
ABBREVIATIONS AND ACRONYMS
ARWSP Accelerated Rural Water Supply Program, Go1
cs Country Strategy
DDWS Department o fDrinkingWater Supply, Go1
DEA Department o f Economic Affairs, Go1
DPMC District ProgramManagement Cell
DWSC District Water and Sanitation Committee
DWSS Department o f Water Supply & Sanitation, GoP
EMF Environmental Management Framework
FC Fully Covered
GP GramPanchayat
GPWSC GramPanchayat Water Supply and Sanitation Committee
Go1 Government o f India
GoP Government o f Punjab
IDA InternationalDevelopmentAssociation
IEC Information, Educationand Communication
MDGs Millennium Development Goals
M&E Monitoring and Evaluation
MoRD MinistryofRuralDevelopment, Go1
MOU Memorandum o f Understanding
MTP Medium Term Sector Program
MV MultiVillage
NABARD National Bank for Agriculture andRural Development
N C Not Covered
NGO Non GovernmentalOrganization
OM Operational Manual
O&M Operation & Maintenance
PC Partially Covered
PIP Project ImplementationPlan
PFU Panchayati Raj Institution
sc Scheduled Caste
so Support Organization
SPMC
sv State Program Management Cell
Single Village
SWAP Sector Wide Approach
SWSM State Water and Sanitation Mission
TOR Terms OfReference
Vice President: Praful C.Pate1
Acting Country Director: Fayez S. Omar
Sector ManagerDirector: Sonia HammadConstance A. Bernard
Task Team Leader: Ghanasham V. Abhyankar
FOROFFICIAL USE ONLY
INDIA
PUNJABRURAL WATER SUPPLYAND SANITATIONPROJECT
CONTENTS
Page
A. STRATEGICCONTEXTAND RATIONALE ................................................................. 1
1. Country and Sector issues................................................................................................... 1
2. Rationale for Bank involvement ......................................................................................... 3
3
B.3. Higher level objectives to which the project contributes....................................................
PROJECTDESCRIPTION ................................................................................................. 3
1. Lendinginstrument............................................................................................................. 3
2. Program objective andphases............................................................................................. 4
3. Project Development Objective andKey Indicators........................................................... 4
4. Project components............................................................................................................. 6
5. Lessons learned and reflected inthe project design............................................................ 8
9
C.6. Alternatives considered andreasons for rejection..............................................................
IMPLEMENTATION ........................................................................................................ 10
1. Partnership arrangements (ifapplicable) .......................................................................... 10
2. Institutional and Implementation arrangements................................................................ 10
3. Monitoringand evaluation o f outcomes/results................................................................ 14
4. Sustainability..................................................................................................................... 14
5 . Criticalrisks andpossible controversial aspects............................................................... 15
16
D APPRAISAL SUMMARY
.6. Loadcredit conditions andcovenants...............................................................................
................................................................................................. 16
1. Economic and Financial Analysis ..................................................................................... 16
2. Technical........................................................................................................................... 18
3. Fiduciary ........................................................................................................................... 19
4. Social................................................................................................................................. 21
5. Environmental Assessment ............................................................................................... 22
6. Safeguard Policies............................................................................................................. 24
7. Policy Exceptions andReadiness...................................................................................... 24
Annex 1: CountryandSector or ProgramBackground ......................................................... 25
Annex 2: Major relatedProjectsFinancedby the Bank and/or other Agencies ..................30
Annex 3: ResultsFramework andMonitoring ........................................................................ 31
Annex 4: DetailedProjectDescription ...................................................................................... 34
Annex 5: ProjectCosts ............................................................................................................... 42
Annex 6: ImplementationArrangements ................................................................................. 44
Annex 7: FinancialManagement and DisbursementArrangements ..................................... 55
Annex 8: Procurement Arrangements ...................................................................................... 66
Annex 9: Economic and FinancialAnalysis ............................................................................. 76
Annex 10: Safeguard Policy Issues ............................................................................................ 82
Annex 11: Action Plan for Enhancing Transparency and Accountability ............................ 88
Annex 12: Decentralization and role of PRIs ........................................................................... 94
Annex 13: Social Assessment ................................................................................................... 102
Annex 14: EngineeringAspects ............................................................................................... 110
Annex 15: Project Preparation and Supervision ................................................................... 116
Annex 16: Documents inthe Project File ............................................................................... 117
Annex 17: Statement of Loans and Credits ............................................................................ 118
Annex 18: Country at a Glance ............................................................................................... 122
MAP
IBRDNo 35078
.
INDIA
Punjab RuralWater Supply and Sanitation Project
PROJECTAPPRAISAL DOCUMENT
South Asia
SASSD
Date: November 15,2006 Team Leader: Ghanasham V. Abhyankar
Acting Country Director: Fayez S. Omar Sectors: Water supply (80%); Sanitation
Sector ManagerDirector: Sonia Hammam (20%)
Themes: Rural services and infrastructure(P)
Project ID: PO90592 Environmental screening category: B Partial
Assessment
LendingInstrument: Specific Investment Credit
For Loans/Credits/Others:
Total Bank financing (US$m): 154.00 IDA Credit
ASSOCIATION
ITotal: 241.40 20.00 261.40
Borrower:
India
ResponsibleAgency:
Government o fPunjab, Department o f Water Supply and Sanitation
Project implementationperiod: Five andhalfYears
Expectedeffectiveness date: January 31,2007
Expectedclosing date: March 31,2012
Does the project depart from the Country Strategy (CS) incontent or other
significant respects?Re$ PAD A.3 [ ]Yes [XINO
Does the project require any exceptions from Bankpolicies?
Re$ PAD D.7 [ ]Yes [XINO
Have these been approvedby Bankmanagement? [[ ]Yes [XINO
]Yes [ IN0
I s approval for any policy exception sought from the Board?
Does the project include any critical risks rated "substantial" or "high"?
Re$ PAD C.5 [XIYes [ ] N o
i
Does the project meet the Regional criteria for readiness for implementation?
Re$ PAD D.7 [X ]Yes [ ] N o
Project development objective Re$ PAD B.2, TechnicalAnnex 3
Assisting Government o f Punjab (GoP) inincreasingaccess o frural communities to improved
and sustainable rural water supply andsanitation services.
Project description Re$ PAD B.3.a, TechnicalAnnex 4
Component 1 :Program Management :Setting up and operations o fProgram management Units
and support services, M&E, capacity building andimplementing Information, education and
communication campaigns
Component 2 :Community Development : Providing capacity support and buildingcapacity o f
the village local governments and user communities indevelopment andmanagement o f rural
water and sanitation facilities and services
Component 3 :InfrastructureBuilding :Construction of new drinkingwater supply and
community sanitation schemes and up-gradation and rehabilitation o f existing schemes
Which safeguard policies are triggered, ifany? Re$ PAD D.6, TechnicalAnnex 10
OP 4.01 Environmental assessment
Significant, non-standard conditions, if any, for:
Re$ PAD C.7
Board presentation: None
Loadcredit effectiveness: None
Covenants applicable to project implementation:
(i) allRWSSsectorinvestmentschemes,regardlessofthesourceoffinancing, GoPshall
For
take all necessary steps to ensure that such schemes are consistent with its SWAP Program and
its implementation strategy, as agreed with the Association, andthat the number o f ongoing
RWSS sector investments financed outside the SWAP Program are reduced duringthe period o f
Project implementationsuch that the amount o f investments insuch schemes does not at any
time exceedRs476 Crores.
(ii)IncarryingoutPartC.2 (a) oftheProjectcoveringPerformanceimprovementofexisting
water supply schemes, GoP shall ensure that the operations and management and the financing
responsibilities o f selected single village water supply schemes and intra village works of
selected multi village water supply schemes are transferred from DWSS to the relevant GP and
GPWSC inaccordance with a time-bound action plan, satisfactory to the Association.
(iii)respectofcomponentsC2(b)andC3coveringinstallationofinnovativetechnologiesand
In
community sanitation schemes respectively, no withdrawal shall be made unless the first five
pilot schemes o f each technology option shall have commenced operations satisfactory to the
Association.
..
11
A. STRATEGIC CONTEXT AND RATIONALE
1. Country and Sector issues
1. Coverage and Service Levels at National Level: India has achieved significant success
inprovidingbasic minimumservice level for drinkingwater supply(40 litersper capita per day)
to most of its rural population. However, for various reasons operational and financial
sustainability o f Rural Water Supply and Sanitation (RWSS) services has not been achieved.
Depleting ground water table and deteriorating ground water quality are threatening source
sustainability. Till recently, the program was almost totally government run without the
participation o f other stakeholders resultingin consumer perception o f water as a free (service)
commodity with the government having the entire responsibility for running the operation. The
RWSS program faces serious challenges in the coming years to meet the needs o f an expanding
population and growing demand for improved service levels.
2. The level of household sanitation in rural areas is extremely low (less than 40%
households have toilets). The rural population generally lacks an understanding o f the linkages
between lack o f sanitation and unsafe hygiene practice, and diarrhea related diseases. The
resultant morbidity and mortality, particularly in young children, significantly affects their
growth, educational attendance and achievement and productive activity. Progress in sanitation
and safe hygiene practice will require significant social marketing and awareness campaigns for
demand creation.
3. Lack o f reliable household level information and weak monitoring systems make it
difficult to realistically assess achievement o f sector goals. Go1 i s currently undertaking a
national habitation survey to update the coverage and sustainability database that would help
improve results orientation inthe sector.
4. Government of India's (GoI) Tenth Plan Policy and Strategy: Go1 recognizes the
need to improve the functionality and sustainability o f the sector and has launched significant
sector reforms since 1999. Thus, GoI's 10th Plan policy objectives (as revised in its mid-term
review o f 2005) for RWSS are to: a) accelerate sanitation coverage to achieve 35% coverage by
2007, 50% coverage by 2010, and provide 100% o f rural schools with sanitation facilities; b)
strengthen sustainability o f both water supply systems and water sources; c) provide minimum
(basic) service level o f safe drinking water to all rural habitations by 2009; and d) provide
demand based higher water service standards to interested rural habitations by 2010. These
policy objectives are expected to continue in GoI's llth Plan (2007 - 2012), currently under
preparation.
5. The main challenges now are to expand and spread the reform approach countrywide.
This is required to meet GoI's policy objectives and achieve (and even exceed) the sector's
Millennium Development Goals (MDGs) of halving the proportion o f people without access to
safe drinkingwater andbasic sanitationby 2015. Its new centrally sponsored "Swajaldhara" and
Total Sanitation Campaign (TSC) programs are a clear indication o f this desire to expand and
hasten the reform process. Go1 also plans to work with States to move towards statewide
implementation o f RWSS reforms. Establishing the necessary institutional arrangements,
buildinginstitutionalcapacity, andbridgingfinancing gaps inscaling-up are the keypriorities.
1
6. Key Sector Issues in Punjab:Some 30% o f the villages still do not have access to basic
drinking water service. The remaining 70% villages do have piped water systems, but many o f
these are suffering from extremely low customer base and poor O&M performance. As a result,
about 60 % households in Punjab are dependent on unsafe private drinking water sources. With
highO&M costs ofthe Departmento fWater Supply and Sanitation (DWSS) and low O&M cost
recovery from users, the water supply systems are becoming unsustainable. About 50%
households have toilets. However, highly charged septic tank effluent flowing inopen drains, has
degraded the environmental conditions in the villages and pose a serious health hazard. The
DWSS accountability and incentive structures favor new construction with little concern for the
quality o f service. The new schemes are planned and built with limited or no participation o f the
endusers indecisionmaking or service management. Thus, the current institutional, operational
and financing arrangements present constraints and challenges in achieving service
improvements or ensuring long-term sustainability. Main causes for poor sector performance
include: lack o f separation o f different roles within the sector institution, limited decentralization
and local capacities, fragmented sector finances, highly centralized decision-making and
approvals, low priority and accountability in ensuring customer satisfaction, and weak
monitoring and user feed-back systems.
7. Government of Punjab's (GoP) Vision and Medium-term Sector Program: GoP's
vision and long term strategy aims at covering all Punjab villages with 100 % water supply
coverage with higher service standards and private service connections to most households as
well as providing modem underground waste water collection and disposal systems at an
estimated cost o f about U S $ 1.2 billion- over a period o f next 15 years. However, inthe medium
term (over the next 5 years) it proposes to implement a more modest and prioritized Medium
term sector Program (MTP) o f about US$364 M, considering the likely financing envelopes
that may be available, the State's absorptive capacity, and DWSS and rural local government's
implementation capacity.
8. MTP will still aim to achieve full coverage for water supply with at least basic service
level o f 40 liters per capita per day in all Punjab villages, but propose smaller investments in
community sanitation schemes. Thus the MTP's main objectives include: a) coverage o f all Not
Covered (NC) and Partially Covered (PC) villages to reach at least a Fully Covered (FC) status,
b) ensuring sustainability o f water supply services, and c) initiating measures to improve village
level environmental sanitation. This will be achieved through empowerment o f GPs and local
communities for decentralized service delivery, and implementing institutional reforms to
strengthen DWSS capacity to effectively manage and monitor the use o f participatory processes
and demandresponsive approach.
9. The proposed MTP will be financed from already assured funding o f about US$ 102 M
for completing the ongoing schemes and by implementing a US$ 262 M proposed SWAP
program with assistance from Go1and IDA. The SWAP program will fund the schemes that use
the new consistent sector policy principles and implementation arrangements for all sources o f
financing. GoI' future commitments and the IDA funding support with contributions from GoP
and user communities will be under the proposed SWAP Program.
2
2. Rationalefor Bank involvement
10. The overarching challenge o f the Bank's Current Country Strategy for India (Sept 2004)
i s to leverage Bank's limited resources to scale up its impact. Thus, Bank's support to India's
RWSS program will mainly aim at assisting Indiainscaling up nationwide reform approach. Go1
has requested the Bank to develop statewide scaling-up projects, adopting SWAP in seven states
(Tamil Nadu, Uttaranchal, Punjab, Andhra Pradesh, Rajasthan, MadhyaPradesh and Assam). It
believes that these projects will develop best practice examples of statewide scaling up and
provide strong demonstration impact nationwide.
11. Punjab's ownership and keen desire for reforms is evident from a number o f reform
initiatives already taken by the State. Further, despite being a relatively prosperous state, Punjab
needs significant improvements in the quality o f rural water and sanitation service delivery
requiringboth additional investments and reforms. Thus, extendingBank support to Punjab will
be a part o f the Bank's strategy to assist Go1in scaling up the reforms nationwide and contribute
to achieving the water and sanitation relatedMDGs.
3. Higherlevelobjectivesto which the projectcontributes
12. The project will help GoP inachieving its broader development goals o f achieving health
and water security, poverty reduction, higher enrollment o f children, particularly girls, in
schools, and reduction in infant mortality and maternal mortality rates. The project will also
support GoP's efforts in accelerating the process o f decentralization by building the capacity o f
the rural local governments indevelopment and delivery o f rural services.
B. PROJECTDESCRIPTION
1. Lendinginstrument
13. The proposed instrument i s the Specific Investment Credit o f US$ 154 million
equivalent, which will support GoP's medium term program (MTP)' for the Sector. A SWAP has
beenchosen to implement a consistent sector policy for all new' investments irrespective o f the
source o f financing. GoP's MediumTerm Sector Program (MTP) includes ongoing water supply
schemes (US$ 102 million) and implementation o f the proposed SWAP Program (US$ 262
million). Bankwill fund a share o f GoP's expenditure only under the SWAP program.
14. InIndia's RWSS sector, this willbethe first time (along withUttaranchal) that Bankand
Go1will work towards supporting state owned and developed sector program which will adopt
single sector policy and consistent implementation strategies. This is a major step forward in
moving away from the current fragmented sector finances and approaches- and the proposed
project will pave way to eventual unifying o f processes and pooling o f funds. This is considered
as a pragmatic approach giventhe current country and the sector context.
* The definition
1 as inSectionA 1 para 7 ofthis PAD
The key elements of the new sector policy are inSection B3 para 17 to 27 of this PAD
3 The definition ofnew investments is described inSectionB4 ofthis PAD
3
15. The SWAP is expected to enhance the Bank's development effectiveness through
statewide implementation, build stronger partnership with Go1 and the partner state and
contribute to efficient management of sector resources. During project implementation, a plan
would be developed to transit from multi programs to just one state RWSS program including
phasingout o fthe ongoing programs.
2. Program objective and phases
Not Applicable
3. Project Development Objective and Key Indicators
16. The Project development objective will be to assist GoP in increasing access of rural
communities to improved and sustainable RWSS services. The key outcome indicators will be:
(i)percentage o f habitations inthe rural areas o f Punjab that are fully covered (FC) for access to
drinkingwater; (ii) percentage of rural households in the state with access to safe and adequate
drinking water supply throughout the year; and (iii)percentage of participating habitations
having satisfactorily performing community sanitation facilities.
GoP's New RWSS Sector Policy
17. GoP's new sector policy has been approved and communicated to the Bank (vide Chief
Secretary, GoP's letter o f July 12, 2006) and also included in the Project Implementation Plan.
The key elements o f GoP's proposed new sector policy are summarized below4 :
Policy/ Institutiona1
18. GPs / GPWSCs will be responsible for planning, technology selection (type o f scheme),
procurement (bid invitation, award), construction and O&M management o f all new Single
Village (SV) water schemes and for all intra-village water supply works of Multi Village (MV)
water supply schemes with capacity support from DWSS / NGOslPrivate sector .
19. The role o f DWSS will mainlycover: (i) RWSS program management including
overall
IEC and M&E o f activities, outcomes and impacts; (ii)development and management o f
common infrastructure o f MV schemes with improved financial and operational performance;
(iii) andconstructionofcommunitysanitationschemeswithactiveparticipationofGPs
planning
and households; and (iv) arranging social, technical and management support to GPs and
GWSCs for all intra-village RWSS schemes and services.
20.
determined upfront by GoP - will be adopted in each district. GPs will need to apply to DPMC
Self selection of Villages based on transparent eligibility and selection criteria -
endorsing the project principles to seek project support.
21. Scheme and Tender approvals: The District Annual plans for each year will be prepared
byDWSC and approved by SWSMbefore the end o fthe previous fiscal year andincluded inthe
state budget. Thereafter, approvals o f all detailed scheme reports and implementation phase
proposals upto Rs.30 lakhs will be provided by DWSCs. While GP/GPWSC and DPMC will
Various Institutions mentioned inthis Section are defined inSection C2 para40 to 49 ofthis PAD
4
approve tenders up to the same value for SV and common infrastructure o f MV schemes
respectively.
22. All existing SV water supply schemes will be transferred to GPs/ GPWSCs in a time
boundmanner (in about 2 year's time). For all existing MV water supply schemes, transfemng
intra-village O&M management and financing responsibility to GPs/ GPWSCs will be
progressively completed duringthe project period.
23. For O&M o f common infrastructure o f all New MV schemes, DWSS will deploy private
sector service/ management contracts as per its current practice. For O&M o f SV schemes,
DWSS will provide guidance to GPs/ GPWSC on entering into management contracts including
billing and collections. DWSS will also gradually introduce the practice o f O&M management
contracts for existingMV schemes linked to natural attrition o f current operating staff o fDWSS.
Financial
24. O&M financing o f Water Supply Schemes: For all new SV Schemes, users will finance
the recurrent O&M costs (electricity bill, staff cost, chemical, minor repairs and routine
maintenance). For all existing SV Schemes, full O&M cost recovery from user charges will be
intra-village water distribution system + bulk water charges to be fixed by DWSS. DWSS will
achieved ina phased manner. For all new MV schemes, GPs/GPWSC will finance O&M cost o f
implement a phased program o f installing bulk water meters at the entry to each village in all its
existing MV Schemes. This will help DWSS to introduce water audit, better assessmento fwater
supplied to each village, and introduction o f billing based on volumetric measurement o f bulk
water supply inexisting MV Schemes.
25. User Capital Cost Sharing for Water Supply Schemes: On the lines o f GoI's Swajaldhara
program, users will finance at least 10% o f capital cost irrespective o f the technology choice or
SV or MV schemes. The capital cost sharing by users will be at 50% of the above rule for the
Scheduled Caste villages, villages in hilly areas and in international border/ flood prone zone.
To ensure affordability, an upper ceiling o f Rs.1500/- per house hold will be applicable for the
scheme-users as a group. GPWSC can adopt internal cross subsidizationifthey wish.
26. User Capital Cost Sharing for Community Sanitation : the level o f user contribution to
capital costs will be same as for water supply - except that up to 50 % o f user contribution can
come from other sources such a GP funds andprivate donations.
27. Funds Flow: RWSS investment hnds will be transferred by SPMC to GPs/ GPWSCs-
through an independent channel o f SPMC- DPMC-GPWSC (and not through DWSS divisions
providing technical and monitoring support) for SV schemes and for intra-village works o f MV
schemes. GPWSCs will be responsible for management o f investment and O&M f h d s for all
intra-village water supply schemes (with adequate capacity support from DWSS).
5
4. Projectcomponents
28. The Program will be implemented in all 19 districts of Punjab. There are 12,278 GPs
(approximately the same number o f villages or habitations) in Punjab. As per 2001 census, total
rural population in Punjab is 16.1 million, of which 30 % is Scheduled Caste (SC) population.
There i s no tribal population inPunjab.
29. The GoP's proposed SWAP Program for FY 2006-7 to FY 2011-12 aims to implement
water supply schemes in about 3000 N C F C villages and thereby achieve 100% coverage o f all
villages in Punjab. Inaddition, the proposed Program intends to improve operational and
financial performance o f existing water supply schemes and initiate introduction o f community
sanitation schemes on a pilot basis. The proposed SWAP Programi s expected to directly benefit
about 7.4 millionpeople (about 46% the state's rural population). The programwill particularly
benefit population belonging to Scheduled Caste (SC) and those living in hilly areas and along
the international border (about 40% o f the State's population).
30. The size o fthe proposed SWAP Programwithinthe MTP i s estimated at Rs.1290 crore or
about US$262 million. The SWAP Program will have three main components: Component A:
Program Management, Component B: Community Development and; Component C:
Infrastructure Building. The estimated investment and operating costs for these components and
the Bank financing shares are summarized below.
T
Component Total Financingshare BankFin.of Bank*
(US$M) GoP financingas
program contributions a YOof GoP
(US$M) contribution
(US$M) Go1 GoP Comm.
ProgramManagement 31.4 31.4 31.4 100%
CommunityDevelopment 24.4 24.4 24.4 100%
Infrastructure Building 205.6 42.1 147.8 15.7 98.2 66.0%
~
TOTAL-SWAPProgram 261.4 42.1 203.6 15.7 154.0 75.6%
I I I I
*Ban will reimburse GoPSshare o
31. Component A: Program Management (US$ 31.4 M): This component will finance
establishment and operating costs o f the program institutions and training, consultancies, and
goods and equipment for: management support to DWSS, information, education and
communication (IEC) campaigns, operatingM&E and M I S systems, capacity buildingprograms,
sector development programs and studies; and grants to be provided as awards to best
performing GPs and User groups. The main target group is the project institutions and support
organizations and the main intermediate results indicators are: i)Participating habitations for
schemes under SWAP as a % o f total habitations with a N C or PC status (cumulative habitations
covered); (ii)Participating habitations for performance improvements o f existing SV/MV
schemes as a % o f total habitations plannedto be covered (cumulative habitations covered); and
(iii)%ofresourcesdisbursedtoGPsthatareutilizedintime.
6
32. Component B: CommunityDevelopment(US$ 24.4 M): This component will mainly
finance consultancy contract fees o f the Support Organizations (SOs) (personnel, other
resources, travel, documentation, etc) for their support services to DWSS, GPs and project
communities and the operating cost o f DWSS staff (travel and incidental expenses but not their
salaries and allowances) for providing support to village communities for both new schemes and
for performance improvement o f existing schemes. The DWSS staff will work with village
support teams and / or SOs to provide single window assistance to GPs and communities in
technical, financial and management aspects. SOs equippedwith social mobilization skills, will
be enlisted to provide support in implementing the agreed participation framework. Roles and
responsibilities o f the key stakeholders (GP/GPWSCs, SOs and DWSS), funds flow and
procurement procedures will be spelled out ina tripartite agreement. Finally, the component will
also finance engineering design support. The intermediate results indicators for this component
include : (i)% o f participating GPWSCs with high or medium rating for operational
sustainability of their schemes; (ii)% o f participating GPWSCs meeting the full O&M costs
through user charges; and (iii) YOo f participating GPWSCs o f MV schemes with a billing to
collection ratio o f >90% for bulkwater charges.
33. ComponentC: InfrastructureBuilding(US$205.6 M):
C1: New/ Upgrading of Water Supply Schemes for N C P C habitations (US$ 131.7 MI:
This component will mainly finance civil works contracts for construction o f new or
improvement o f existing drinking water schemes in about 3000 NC/ PC villages in the State.
More than 80% o fthe drinkingwater schemeswill be based on ground water sources and a range
o f technology options which would be selected by the communities and DWSS. Traditionally,
DWSS provides only piped water systems with two technology options: deep tube well and canal
based schemes to support either SV schemes or MV schemes. MV schemes are selected when
local water sources are not o f acceptable quality or do not guarantee adequate quantity. About
30% habitations are expected to demand SV water schemes. Remaining schemes are expected to
be MV schemes based on either ground water or surface water (canals) as their source.
However, MV schemes in Punjab generally cover only about 2-4 habitations and are small
enough for progressive local management by communities and GPs.
C2: Performance Improvement o f Existing Water Supply Schemes (US$ 54.9 M): The
sub- component C2 (a) will mainly finance up-gradation o f existing water supply schemes in
some 1600 FC villages to improve their operational performance. This is aimed at transfening
the management responsibility to Gram Panchayats for SV schemes and intra-village works of
MV schemes. These will include augmenting the source, repairs and replacement o f leaking
pipes, rehabilitation of tanks and other system components, repairs o f motors, disinfection units,
introducing distribution zoning and extension of pipelines. In addition, it will support fixing of
bulkwater meters in all the existing MV water supply schemes. The sub-component C2 (b) will
finance installation o f defluoridization and reverse osmosis plants and potable water treatment
units, initiallyon a pilot basis. All these schemes are expected to provide greater user satisfaction
with small incrementalinvestments.
7
C3: Construction o f Community Sanitation Schemes (US$ 19.0 M):This component will
finance construction o f small bore sewers and sewerage schemes in about 100 villages which
already have good household sanitation coverage but where the release o f septic tank effluent on
the village streets and open drains creates a serious health hazard. The sub-component will also
finance rehabilitation of existing sullage drains and village ponds in about 1000 villages - to
improve water disposal systems and reduce environmental degradation.
34. The main intermediate results for component C are: (i) % o f new (and upgraded) water
schemes under SWAP Program completed within planned time and costs; (ii) % o f participating
GPWSCs achieving planned performance improvements in rehabilitated schemes measured 6
months after completion; and (iii) % of new community sanitation schemes completed within
plannedtime and costs.
5. Lessons learned and reflected in the project design
35. International experience: The emerging international good practice calls for treating
water as an economic and social good managed at the lowest appropriate level. For the provision
of RWSS, this requires that the consumers be engaged in the process o f selecting, financing,
implementingandmanagingsystems that meet their demands andwillingness to pay. Yet putting
demandresponsive principles into practice presents significant challenges. The experiences from
the Bank-assisted projects in Paraguay, Bolivia, Ghana, China, Indonesia, Nepal and Sri Lanka
have demonstrated the effectiveness o f these approaches in improving the sustainability o f
investments. Global experience in use of SWAPS in the RWSS sector, though limited does
provide evidence o f its strength, especially for countrywide scaling up o f reforms. Experience
from health sector i s particularly relevant inthis regard.
36. Indian experience: The Bank has engaged actively in the RWSS sector in India since
1991. Bank support has helped to pilot and begin to scale up a reform program for RWSS
delivery across several states - targetingover seventeen million rural beneficiaries to date. There
have been some important lessons from the Bank engagement. Foremost among these i s that
sustainability i s a major challenge which i s best addressed by involving coIlimunities in the
design, construction and operation o f schemes, including through their contribution to capital
costs and their financingo f O&M costs. Given these lessons, it i s clear that GoVstate investment
and Bank support to RWSS should emphasize beneficiary involvement and empowerment;
institutional reform and capacity buildingof state/local governments and communities; the active
participation o f NGOs; promotion o f cost recovery; andtargeting o f services to the poorest areas
and vulnerable groups. Though official statistics indicate good progress across India, direct
observation suggests that the data substantially overstates access to safe drinking water and
sanitation. Therefore, it is clear that large investments remain to be made ifthe MDG for access
to safe water is to be achieved, and therefore the main challenge is to roll out the lessons learned
on a much larger scale.
37. The OED's Impact Evaluation Report o f five Bank-assisted India RWSS projects (May
1998) as well as lessons learned from projects supported by other donor agencies (Netherlands,
DANIDA, DFID) and GoI's own sector reform pilots in India have also provided valuable
lessons to designing participatory projects and are reflected in designing this project. Some
experiences and key lessons learned so far from these national experiences and built into the
project are:
8
(a) Policv: Ownership of the project design, at political, bureaucratic and operational levels
i s a prerequisite for project success. A conducive policy environment and willingness to learn by
doing are equally vital for success. Project design should respond to villages' desire for high
service standards. Villages should be selected based on their felt need and an expression o f the
demandthrough a self-selection process.
(b) Institutional: The PR institutions should be well integrated into the project's institutional
design. Organic links between user committees and GPs are essential for institutional sustainability.
NGOs are an important option to build beneficiary capacity, generally due to their better credibility
with the communities. Beneficiary participation and capacity buildingtakes time, and this should be
factored into project design and implementation. Changing mandates and mind-sets of state
agencies, capacity building of all stakeholders need to be at the core o f project design. Capacity
building efforts for project staff should address motivation, team building and managerial aspects.
Concurrent monitoring and evaluation, innovating and experimenting, learning from experiences
contributes positively to improving project performance. Women's active participation improves
local ownership and the quality o f implementation. Rehabilitation and integration o f existing
facilities with the new schemes is essential for cost effective andsustainable system improvements.
(c) Financial: Partial financing o f capital cost by the users has proved to be a viable option,
however, the cost recovery rules should be simple and their administration user-friendly. User
management and financing o f O&M has also proved to be viable. Eventhough rural water projects
have made great strides in getting rural villagers to cover more o f the operating costs o f their
systems, nowhere in the world are communities yet ready to cover the costs o f a major overhaul
and/or the complete replacement o f the most expensive components o f their systems after only one
project. Achieving financial self-reliance may not be a one-project exercise.
6. Alternatives consideredandreasonsfor rejection
38. Alternatives that were considered and rejected and the selected option are briefly presented
below.
(a) Continuing Business as usual through DWSS: GoP's new policy framework requires
adopting demand responsive and decentralized service delivery responsibility through rural local
governments. The current DWSS model supports a top-down supply driven approach with highly
centralized decision makingwith no role for users to participate in any decision making or shoulder
service management responsibility. It focuses on infrastructure building rather than on service
delivery or its sustainability. This option inits current form was therefore rejected.
(b) Implementation throuh PRIs: It would be desirable for rural infrastructure projects to be
implemented through PRIs. The process o f devolution o f functions and finances to PRIs and the
transfer o f hctionaries to PRIs has begun. However, it i s too early to move to complete sector
management byPRIs inPunjab. Hence this option was also rejected.
39. The ProposedOption:The proposedoption is a combination o fthe above two models such
that the GPs with user committees start taking greater responsibility inRWSS facility improvements
and service management and the DWSS starts providing capacity support to them rather thanbeing
an implementingagency. Further because of its hightechnical capacity, DWSS will continue to be
9
responsible for more complex MV water supply schemes, but with improved operational and
financial performance. Even in MV schemes, the intra-village system will be managed by the
GPs/GPWSCs. This would be a major change in Punjab's RWSS service delivery systems and
would pave the way for eventual transfer o f fuller RWSS responsibilityto GPs andPRIs.
C. IMPLEMENTATION
1. Partnershiparrangements(if applicable)
No other international agencies are financing the project.
2. InstitutionalandImplementationarrangements
(Refer OrganogramsinAnnex 6)
40. DWSS will have the leadresponsibility for program implementation and ensuringthat the
program development objectives are met. The functions o fpolicy, managing the reform process,
and service delivery wouldbe separated as below:
MainFunction ResponsibleInstitution
Policy, Annual Plansandbudget approvals State Water and SanitationMission (SWSM) andDistrict Water
and Sanitation Committees (DWSC)
Leadingandmanagingthe reformprocessand DWSSProgrammanagementwing : State ProgramManagement
outcome monitoring Cell (SPMC) and District ProgramManagementCells(DPMC)
Implementationand servicedelivery DWSSOperations wing (ie. regular Circles/divisions/ sub divns)
and GramPanchayatWater andSanitationCommittee
(GPWSC) inthe GramPanchayats
41. The State and district level water and sanitation missions have already been set up under
the GoI's Swajaldhara program. They have been reconstituted to expand their mandate to cover
the management o f entire MTP. The SPMC & DPMC would be the new structures created by
redeployment and reorganization o f some o f the existing divisions o f DWSS. These will be an
integral part of the DWSS's current structure. The implementation and service delivery
responsibility will be shared between DWSS's existing organizational structure (Operations
wing) and the GPWSCs. At the village level GPWSC will be set up as a committee o f the GP
and will be the key driver o f community empowerment at that level. Distribution of primary
institutional responsibilities, by component, are described below:
t
Comp A: Programmanagement State Level SWSMwith SPMC
District Level DWSCwith DPMCs
CompB: Community Village and Scheme Level DWSS OPswing
Develo ment
Comp C: Infrastructure SV water supply schemes andIntra-villageworks of GPWSCs
Building M V water schemes
Commoninfrastructure of M V water schemes; Up DWSSOPs wing in
gradationofExisting schemes, Community partnershipwith GPWSCs
Sanitationschemes
10
42. The proposed institutional arrangements, roles and responsibilities o f various actors and
their organizational linkages have been described indetail and also depictedin flow chart forms
in Annex 6 and the PIP. A brief description of key actors and their implementation
responsibilitiesi s providedbelow.
State Level:
43. State Water and Sanitation Mission (SWSM): This will be the highest policy making
body in the sector. It will be chaired by the Chief Secretary and the Principal Secretary, DWSS,
will be the Member Secretary. The other members o f the Mission will include: a representative
of the Dept. o f DrinkingWater, MoRD, GoI; Secretaries o f other relevant GoP departments and
three sector experts.
44. State Program Management Cell (SPMC): SPMC has been set up within the DWSS
under the Principal Secretary with an exclusive mandate for providing statewide leadership,
collaboration andmanagemento f RWSS sector reform inPunjab. Its mainfunctions are: overall
program planning and management such as to ensure that the Program development objectives
are fully achieved in a timely manner, management o f sector funds, capacity building o f all
program partners, managing statewide IEC campaigns, ensuring appropriate community
empowerment and participatory framework, ensuringappropriate procurement practices and high
quality o f engineering designs and construction, implementing enhanced transparency and
disclosure Action Plan (see Annex ll), and regular monitoring and evaluation o f sector
performance. It is also responsible for regular review o f strategies and implementation
arrangements in the context o f implementation experiences and for ensuring course corrections
as needed.
45. SPMC's mandate, composition, functions and operational procedures have been agreed
and are included in the project implementation plan. The SPMC will be headed by a Program
Director, an officer not below the rank o f a Chief Engineer or a Joint Secretary o f GoP and will
have about 20 key staff. The staff will be multi-disciplinary including finance, operations, HRD,
M&E, water supply and sanitation engineering, procurement and communications disciplines.
SPMC will recruit project management consultants to support the institutional, finance,
participatory development, procurement and management skills or recruit staff from the private
sector and NGOs/ Support Organizations (SOs) on contract basis. Most engineering staff will be
drafted from within the other DWSS offices. DWSS staff members are already inposition and a
few additional positions are beingfilled with staff on deputation from other organizations or with
staffon a contract basis.
District Level:
46. District Water and Sanitation Committee (DWSC): SWSM's counterpart at the district
level will be the District Water and Sanitation Committee (DWSC), chaired by Chairman o f the
Zilla Panchayat and the Superintending Engineer o f the DPMC will be the member secretary. Its
other members will include Deputy Commissioner (or his representative), heads o f other
departments inthe district, andrepresentative o fNGOs and 3 sector experts.
11
47. District Program management Cell (DPMC): DPMCs have been set up within the DWSS
- one in each district. The DPMCs are headed by a Superintending Engineer (SE) o f the DWSS.
One SE may head one or more DPMCs. The DPMCs will have mandate, composition and
functions exactly like that o f the SPMC, but only for intra district activities and except for policy
and approval o f district plans (which will be done by SWSM). In addition, DMPC will be
responsible for transfer o f investment funds to implementing agencies - viz the GPs / GPWSCs
andDWSS divisions. DPMC will also be responsible for progress reportingto SPMC.
Village Level:
48. GPs will be mainly responsible for seeking project assistance, constituting a GP level
GPWSC representing the user communities and empowering the GPWSCs to take responsibility
for program implementation on their behalf. Duringthe post-implementation phase, the GPs will
monitor the sustainability o f operations and ensure that the GPWSCs satisfactorily discharge
their O&M management function including levying and collecting user charges from the
beneficiaries. For MV schemes, GPs will be responsible for payment of bulk water charges to
DWSS.
49. GPWSC: The GPWSC will represent the community and will have four main functions:
(i)planning, and technology selection, (ii)partial user financing of capital costs, (iii)
procurement and construction, and (iv) management and full financing o f O&M, including
levying and collecting sufficient user charges. The composition o f GPWSCs, their functions, and
method o f selecting members, bylaws, legal framework and relationship with the GPs have been
agreed (included in PIP). The project would make vigorous efforts to maximize women's
representation and management role in the GPWSCs. For MV schemes, scheme level
committees will be set up with representatives from participating GPWSCs to perform the same
functions.
Roleof OperationsWing (OPs Wing) of DWSS
50. For all new investments, the role of OPs wing of DWSS will mainly cover: (i)
development and management o f common infrastructure o f MV schemes; (ii) planning and
construction of community sanitation schemes with active participation o f user groups; (iii) up
gradation o f existing WS schemes; and (iv) arranging social, technical and management support
to GPs and GPWSCs for all intra-village RWSS schemes and services. SMPC and DPMC will
ensure capacity building o f the OPs wing o f DWSS, especially that o f the Sub Divisional
Engineers and Junior Engineers-the main interface actors with the GPs and GPWSCs.
51. For existing WS schemes, OPs wing - DWSS role would be: (i) o f SV schemes
transfer
to GPs; (ii)transfer o f intra-village works o f all MV schemes to GPs in a phased manner; (iii)
O&M management o f common infrastructure o f MV schemes, but with improved operational
and financial performance; and (iv) providing O&M back-up support to GPs/ GPWSCs in
schemes managed by the latter. OPs wing, DWSS will complete construction o f all ongoing
water supply schemes before March2009.
12
ImplementationArrangements
52. Implementation Schedule: The SWAP Program implementation will be launched from
January 01, 2007 but will include GoP's current fiscal year's expenditures that have been
incurred in accordance with the new sector policy. The program will be implemented in all the
19 districts infour batches each coveringon an average about 50 villages per district per year. A
detailed Program implementation schedule has been developed for a 6-year implementation
period.(details inAnnex 6).
53. Pilot batch: Program Implementation was initiated in October 2005 in 90 pilot GPs (4-5
ineach o fthe districts) to develop the modalities o f conducting a demand driven, decentralized,
participatory planningprocess. The planningphase in some 50 villages has been completed and
constructionactivities are expected to start shortly on those schemes.
54. Batch 1: Selection o f villages for the first batch o f schemes (about 500 villages) has
already started and subsequent batches will be launched once every year starting inApril.
55. Scheme Cycle: Each batch would follow a 21 month scheme cycle consisting o f four
Implementation-3 months) for most schemes (for MV schemes it will be spread over 24 - 30
distinctphases (Preplanning-3 months, Planning-6 months, Implementation - 9 months, andPost
months). Model scheme cycles have been developed inpartnership with all the key stakeholders
(see Annex 6) for SV schemes and MV schemes. These will be an important tool for
implementation planningand monitoring o f project activities. The scheme cycle i s not intended
to be a process blueprint, but would be used flexibly to accommodate the needs o f the
communities, GPs and the schemes on a case-by-case basis. However, experience (Karnataka 11,
Maharashtra 11, UP and Kerala RWSS projects) has shown the utility o f such a tool in
implementingthe project's participatory anddemandresponsive approach.
56. Capacity Building: The Program will have a full scale capacity building component.
Capacity o f the GPs and GPWSCs will be built in selection o f schemes, construction and
operation o f schemes andmanagement o f investment and O&M finds. External capacity support
will be provided by DWSS and SOs. The capacity o f the DWSS and SOs themselves will be
built in adopting participatory process and changing mind sets, attitudes and incentives in
supporting such an approach. A detailed capacity building plan has been developed and is
includedinthe PIP.
57. Operational Guidelines: A range of operational manuals and guidelines to facilitate
program implementation and monitoring have been developed. These include guidelines on
village selection criteria and process, scheme appraisal criteria, and model formats for various
agreements, MOUs to be signed with GPs and GPWSCs. Operational manuals on fiduciary,
technical and safeguard aspects have been developed and agreed. Where necessary, GoP orders
have been issued to formalize setting up new institutions, their mandates and powers and
approval o f various operational manuals. All these have been documented and referenced in the
PIP.
13
3. Monitoring and evaluation of outcomeshesults
58. With increasing national and international focus on sustainability o f development over
the past decade, GoI, States and the Bank have developed considerable capacity, experience and
tools to monitor intermediate results and outcomes o f RWSS services with a particular focus on
service quality and sustainability. Well functioning computerized M I S have also been developed
and are effectively used in project management in all recent Bank financed RWSS projects.
These systems have set up the indicators and methodology for gathering village-based
information on all four areas: inputs, outputs, sustainability and outcomes. This experience has
been drawn upon indeveloping the results monitoring system for this project.
59. T e e s o f monitoring: Inthe context o f SWAP, the M&E system is designed to align with
the normal government systems as far as possible, avoid information overload and provide
incentives through GP level awards. A key objective o f the M&E system i s continuous learning
duringimplementation.
60. Types o f indicators: GoP has developed three sets o f indicators: (a) inputs-outputs to
measure program implementation performance including related process indicators; (b)
intermediate results indicators to measure performance on specific program components
including service performance and sustainability assessment o f WSS services; and (c) outcome
indicators to assess achievement o f program development objectives in relation to access and
coverage. Annex 3 provides details o fthese indicators.
61. Monitoring reports and MIS: One coordinated set o fprogram management reports (PMR)
has been designed to capture all monitoring results, which will be generated at DPMC and
SPMC levels on a quarterly and annual basis. The quarterly PMRs will focus on routine program
implementation whereas the annual PMRs will also include strategic monitoring o f intermediate
results and outcomes. Institutional responsibilities for the M&E system at different levels for
collection, analysis and reporting o f information, as well as mechanisms to enable efficient use
o f the M&E system by managers, policy makers and other key stakeholders, have been
identified. Consultant recruitment for designing and operating the computerized MIS will be
done inthe first year o f operation.
62. The Bank'sglobal knowledge and experience will provide an important input to SPMC in
continuously refiningthe M&Einitiatives duringimplementationas more experience i s gathered.
4. Sustainability
63. Sustainability implies that the water and sanitation system is operated and maintained
beyond the life o f the project, and is able to generate adequate cash flows for future
expansiodrenewal. The factors critical for sustainability o fthe project are summarized below:
(a) Ownership and financial sustainability: The proposed self selection process o f GPs and
capital cost sharing by users will be first indicators of ownership and demand by the
communities. Since the GPs and GPWSCs will have greater control over decisions and
resources, there i s a greater chance that they will also raise resources to manage scheme
operations on a sustainable basis.
14
(b) Water source sustainability will be enhanced by adopting scientific practices in locating
these and implementing associated water conservation measures.
(c) Water and sanitation systems sustainability will be strengthened by improved design and
construction practices and by building capacity o f the GPs and GPWSCs in all aspects o f O&M
management and providing initial support during the post-construction period. Construction and
water quality monitoring and surveillance will be important program inputs.
(d) Institutional sustainability: GoP has set up the new structures within the existing sector
institution to take over the responsibility o f shifting the current target driven top down approach
to a demand responsive approach over the entire state. Sustainability of GPWSCs is likely
because o f their legal empowerment and the positive experience o f the pilot projects. Thus, the
project institutional structure uses the existing delivery channel at the GPs, strengthens them with
new enabling government structures at the state and district levels andis likely to be sustainable.
(e) Post Implementation monitoring and back-up support: The Program implementation
arrangements provide for regular monitoring o f scheme performance andback-up support to GPs
and GPWSCs. It also provides for systematic consumer satisfaction and outcome monitoring
surveys. Feedback from these will provide ample opportunities to take corrective actions to
ensure sustainability of scheme operations, the ultimate measure o fproject success.
5. Critical risks and possible controversial aspects
power with GPs/ communities initiatives; change in accountability and
incentive parameters, GoP commitment to
progressively strengthen decentralization
GPs/ GPWSCs will fail to manage and S Fundreleases only ininstallments andbased on
account for funds satisfactory utilization and physical progress;
special accounting support to GPs/ GPWSCs;
ensure downward accountabilitv
15
Risk RiskRating RiskMitigationMeasure
GPWSC may lack sufficient capacity to M Project's capacity building programs focus on
manage and sustain facilities GPWSC and GPs; post implementation hand
holding and regular O&M back up support and
monitoringby DWSS
The GPsl GPWSCs with DWSS divisions M Award decisions by committees, strengthened
may indulge in corrupt practices in award procurement and award procedures, enhanced
and management o f works contracts transparency and disclosure requirements, strict
use of fiduciary manuals, independent
monitoring o f construction quality and rigorous
supervision by SPMCDMPC will minimizethe
corrupt practices
OverallRiskRating S
Possible Controversial aspects: None
6. Loadcredit conditionsand covenants
64. The following covenants havebeen agreed for project implementation:
(i) For all RWSS sector investment schemes, regardless o fthe source of financing, GoP
shall take all necessary steps to ensure that such schemes are consistent with its SWAP Program
andits implementation strategy, as agreedwiththe Association, andthat the number o fongoing
RWSS sector investmentsfinanced outside the SWAP Program are reduced duringthe period of
Project implementation such that the amount o f investments insuch schemes does not at any
time exceed Rs 476 Crores.
(ii) IncarryingoutPartC.2(a)oftheProjectcoveringPerformanceimprovementofexisting
water supply schemes, GoP shall ensure that the operations and management and the financing
responsibilities o f selected SV water supply schemes and intra-village works of selected MV
water supply schemes are transferred from DWSS to the relevant GP and GPWSC inaccordance
with a time-bound action plan, satisfactory to the Association.
(iii) InrespectofcomponentsC2(b)andC3coveringinstallationofinnovativetechnologies
andcommunity sanitationschemesrespectively, no withdrawal shall be madeunless the first five
pilot schemes of each technology option shall have commenced operations satisfactory to the
Association.
D. APPRAISAL SUMMARY
1. Economicand FinancialAnalysis
65. The economic analysis has been carried out for the SWAP Program. The cost-benefit
analysis uses data from a sample o f representative technology options, based on six technology
types / clusters: tube well based SV scheme for N C or PC habitations; canal based SV and MV
schemes; tube well based MV scheme for N C or PC habitations. The analysis also utilizes data
from a representative household sample survey covering about 3000 households (including 523
control households) in84 GPs.
16
66. The following major benefits havebeen quantified: (i) saved inwater collection; (ii)
time
benefits from increased (incremental) water supply; (iii) savings in recurring and capital costs;
(iv) health benefits from reduction in gastroenteritis, diarrhea and malaria diseases; (v) livestock
benefits from improved quality and yield o f milk. The average unit cost of capital investment
(Rs) per capita for various technology options range between Rs.lOOO - Rs.2000 (Details in
Annex 9). A wide variation in cost is expected across villages, depending on the number o f
households in the village, new schemes to be provided, and the extent of augmentation o f
existing water supply schemes. The O&M cost depends on the type o f scheme and varies from
Rs.2 to Rs.5 per kilo liter o f water (including bulk water and intra-village O&M cost for MV
schemes). The above costs are extrapolated for the entire Program, based on the proposed
phasing o f schemes. The entire SWAP is justified on the basis o f direct benefits to more than
659,000 households from 3000 NC/ PC villages.
67. ERR and Sensitivity Analysis: The ERR o fthe proposed SWAP program is estimated to
be 23%. Sensitivity analysis based on assessedrisks indicate that the program is able to absorb
negative impacts and still generate positive ERR:
. Significant decrease in benefits or increase in total costs: A 54% increase in total costs or a
...36% decrease intotal benefits, or a combined21% increase intotal costs and decrease intotal
benefits reduces the project ERR to 12%;
Delay inimplementation :Ifbenefits are delayed by 3 years, the ERR falls to 12%;
Significant decrease in benefits or increase in water supply costs: A combined 26% increase
inwater supplycost anddecreaseinbenefits reduces theproject ERRto 12%;
Failure o f schemes: If 50% o f water supply schemes fail after 10 years the ERR i s reduced to
18.5%.
Fiscal Impactof PunjabRWSS Projecton GoPBudget
68. RWSS sector has been a priority sector for GoP and the proposedprogram i s inline with
GoP's plan priorities. Total allocation during the 6 year including for the program and ongoing
schemes, represents an expenditure o f about Rs.656 Crore (US$135 M) from GoP's own budget.
This expenditure will be greater in the first three years, due to the completion o f ongoing and
committed schemes. However, even duringthese years, this represents an increase o f about 15%
over the current levels o f RWSS sector allocations by GoP from its own Plan Allocations. The
net impact o fthis on the GoP budgeti s not expected to be substantial.
69. Besides the MTP funding and debt servicing, no significant additional recurrent O&M
costs are expected to be borne by GoP since these would be met through user charges collected
by the GPWSCs. Inaddition, it is also expected that with the successful implementation o f the
SWAPProgram, it will bepossible for the DWSS to reduce its current non-plan allocations (US$
7.5 million per annum) on operations and maintenance o f existing water supply schemes as
schemes are transferred to GPs and reduction in staff costs because o f curtailment on new
recruitment and gradual rationalizationo fbulk water charges for MV schemes.
17
2. Technical
70. Water Supply:There are no major technical issues to be addressed duringpreparation of
water supply schemes or their implementation, since India and Punjab have rich experience in
both simple and complex technologies used in water supply schemes. The schemes will mainly
involve (a) construction of piped water systems - with tube wells or canal sources-for SV and
MV schemes; and (b) up gradation, rehabilitation, and improving operational performance of
existing pipedwater systems.
71. Most water supply schemes will be designed by the DWSS engineers with support from
private sector engineering consultants. The DWSS engineers possess the required capabilities for
design, construction and O&M of the rural water supply schemes. However with a view to
enhance the quality o f designs and drawings and save time inpreparation, new techniques such
as total station methods for survey, standard software for hydraulic designs, auto C A D and GIS
are now being used. Incorporating the above, DWSS has now developed a detailed technical
manual covering design criteria, guidelines on sound engineering practices, standard drawings
and cost estimates, and specifications for construction materials, goods, equipment and civil
works. DWSS has recruited a specialized agency to prepare GIS based water quality and
resource maps which will enable selection o f sustainable water sources. Use o f scientific
methods, such as geophysical surveys, remote sensing data, and resource mapping coupled with
local knowledge, are expected to ensure appropriate selection o f sites for proposed groundwater
sources. DWSS will recruit consultants to assist it in independently ensuring quality control in
design and construction o fwater supply and sanitation schemes.
72. MV piped water schemes: These schemes will involve: (i)combining a top-down
planning and bottom-up demand assessment and (ii)developing and implementing alternate
institutional models for scheme operations to ensure their sustainability. Though DWSS has built
and operated many MV schemes, developing these in partnershipwith the GPs and improving
their operational and financial performance will require change in mind set and a focus on
customer satisfaction. DWSS has already initiated service contracts for components o f MV water
schemes and the scope o f these contracts would be further expanded during implementation
(GoP intends to seek PPIAF support for this).
73. Community Sanitation: The project will include up gradation o f open drains and
rehabilitation o f village ponds used for disposal o f waste water as well as construction and
management o f some small bore sewers/ sewerage schemes. This i s one area where DWSS has
limited capacity and experience. DWSS is seeking expert guidance from Punjab State Council
for Science & Technology in preparing a few sample schemes. There are a range o f technical
design, O&M and financing issues that need to be addressed and piloted before taking up full
scale implantation o f this component. DWSS has agreed that only about 5 schemes will be
implemented over the first two years andtheir operational performance studied before taking up
more community sanitation schemes under the project.
74. Thus, the areas that will need further capacity building are: (a) Improving O&M
management and capacity building o f GPs/ GPWSCs in procurement, construction and O&M
management and (b) technical design and management o f sanitation schemes. The project
provides for intensive capacity buildingo f DWSS and GPs/GPWSCs and also for use o f private-
sector support, which is available.
18
3. Fiduciary
75. Overall, financial managementarrangements as proposedfor the project are considered to
be adequate to account for and report on the project expenditure as well as satisfy the fiduciary
requirements of IDA. The project envisages a sector wide approach to implementation, following
common principles and common internal guidelines for financial management. The FM
arrangements have been built on and integrated with GoPs own systems for budgeting, funds
flow, accounting and internal control with specific strengthening in areas o f audit, financial
monitoring and control over GPWSC and ensuring timely release o f funds. These arrangements
are documented in the Financial Management Manual and the GPWSC Handbook for
Procurement & Financial Management. The project will provide periodic financial reports and
annual audited financial statements broken down by components and expenditure under Go1 and
Bank financed schemes. The Bank and GoI, however, will not pool funds, but provide them in
parallel, to the GoP and there will be some differences in financial reporting (frequency and
content).
76. The GoP would budget for the project by the components split between Go1 funded and
Bank funded schemes on the expenditure side with corresponding provisions inthe receipt side
inthe StateBudget.This will facilitate accounting bycomponents usingmainstreamgovernment
accounting systems. This will be supported by a detailed Annual Work Plan. Finance Dept. will
issue LOC to SPMC (within 2 weeks o f the request from DWSS) based on its quarterly
requirement o f funds, which will in turn reallocate these funds (LOC) to various DPMCs.
DPMCs will be responsible for further release o f funds to GPWSCs and allocation o f LOC to
DWSS Divisions. The LOC system would be used in the project, except at the GPWSC level,
where a separate bank account will be maintained for receipt and payment o fproject funds.
77. Additionally, a Note on the Workings of the State Public Financial Management (PFM)
System in the State (Report No. 36327-IN, May 2006), identified a number o f issues relating to
governance and systemic weaknesses. Suitable measures to mitigate the weaknesses that impact
project implementation have been agreed to. In addition, GoP has developed and shared an
action planto implement the recommendations contained inthe PFMreport.
78. Audit: The Comptroller and Auditor General o f India (C&AG) through its offices in
Punjab will be the external auditor for the project. The C&AG's office will conduct an annual
audit o f the financial statements o f the project covering all sources o f funds (Go1 and the Bank).
The audit report will be submitted to the Bank within six months o f the close o f each financial
year. The Terms o f Reference have been sent to the C&AG for their consent. This will be
supplemented by internal audit o f the project (for SPMC, DPMC and divisions o f DWSS) and
concurrent audit o f GPWSCs by independent firms o f Chartered Accountants as per TOR
consented bythe Bank.
79. DisbursementArrangements: The Bank will finance approx 75 % o f GoP's estimated
contribution to meet the project expenditure (detailed inAnnex 5) subject to a limit o f USD 154
million equivalent. Funds from the Bank will be made available to GoP (through the GoI) under
the standard arrangements between Go1and the States. The Bank will provide an initial advance
which will be transferred by Go1 to the GoP. Subsequent releases will be on re-imbursement
basis, based on Bank's share o f eligible project expenditure. This would be determined on the
19
basis o f the interimexpenditure reports (Component wise) from the AG's accounting system and
confirmed by annual audited financial statements.
80. Retroactive financing: Up to US$l.SM equivalent will be available for financing
eligible project expenditures incurredbefore Credit signing, but on or after February 1,2006
81. Procurement: DWSS will carry out the procurement of common infrastructure o f MV
water supply schemes, community sanitation schemes and goods to be procured under the
project. The procurement ofworks for SV water supply schemes and intra-village works for MV
Schemeswill be done by GPWSC with technical assistance from DWSS.
82. As DWSS has not carried out any procurement under the Bank funded project so far, an
assessment o f the procurement capacity in RWSS sector o f GoP was carried out and
improvements needed to address identified issues have been agreed with GoP. One of the
differences i s that, GoP procures cement, steel, pipes etc. departmentally through centralized
procurement and issues these materials to the contractors. This has been specifically discussed
and DWSS has agreed that for the works to be undertaken under the SWAP programthe supply
o f all materials shall be in the bidders' scope and that GoP will not supply materials to the
contractors. A workshop o f contractors was also held during preparation and during which the
bidders also preferred this approach. There i s also a requirement o f training of DWSS officials
andthat ofGP/GPWSC members to handleprocurementunder the project.
83. Inview ofthe findings inthe PFMreport for Punjab, prepared by the World Bank and
forwarded to GOP on May 19, 2006 a "Risk Mitigation Action Plan" and an "Action Plan for
Enhancing Transparency and Accountability" have been agreed with GoP (Annex 8A andAnnex
11respectively).
84. To follow common procurement methods, a Procurement Manual has been developed,
which addresses the deficiencies observed in the procurement capacity assessment. GoP has
opted to carry out procurement o f goods and works under the project as per the Bank's
Procurement Guidelines, May 2004, andthat o f Consultancy Services as per Bank's Consultant's
Guidelines, May 2004. For procurement of Consultancy services, Bank's standardRFP will be
used as a base. For N C B procurement, GoP has opted to use the bidding documents agreed by
the Bank with Go1 Task Force and as modified from time to time. For procurement following
ICB procedures ifany, the Bank's SBD will be used as a base.
85. The procurement o f works by GPWSC will be in accordance with paragraph 3.17 o f
Procurement Guidelines. GPWSC will also follow N C B and shopping procedures with technical
assistance and guidance from DWSS at various stages. Procurement o f consultancy services will
be required to access consulting firms / NGOs, agencies like Punjab Remote Sensing agency and
Punjab State Council o f Science and Technology and individual specialist/resource persons in
various project planning and implementation activities such as engineering design and
construction management, community mobilization and development, financial and program
implementation management, sector policy studies, M&E and MIS, capacity building and
training and monitoring & evaluation.
20
4. Social
86. Punjab is quite diverse socio-economically.. As much as 30% o f the population (highest
in an Indian state) belongs to Scheduled Caste. Physically, Punjab has a sizeable proportion o f
hilly areas with undulating topography. Further, Punjab attracts a significant seasonal migrant
labor population which renders its economic resource base quite diverse. The state's borders
also serve as `international border' with Pakistan. As a result, a sizeable number of its villages
are classified as `border' villages (falling within a distance o f 16 Km from the Line o f Control)
whose residents encounter/ encountered a variety o f difficulties. Unlike the situation in many
states, a large number o f Punjab's households possess their own drinking water sources (hand
pumps), but quality andcost considerations are compellingthem to look for pipedwater schemes
serving the village as a whole. However, the `customer base' viz. number o f households
officially drawing water from the Government's PWS is quite low and distribution management
is poor. Sullage water disposal is a serious issue in most villages resulting in unhealthy
conditions inmost communities.
87. Provision o f RWSS services through a Government Department, with its
characteristically hierarchical and top-down decision making does not promote accountability to
the communities. Given this setting, the program identifies the following as significant social
issues : (i)ensuring inclusion and enhancing equity, (ii)decentralizing the service delivery
underpinned by the principle o f subsidiarity; (iii) enabling participation, inparticular o f women;
(iv) improving customer base & demand generation; (v) Community capacity supporthuilding;
(vi) change management, enabling transforming the government department into a `facilitator';
and (vii) anIECcampaignto reachthe stakeholders effectively.
88. Inclusion and Participation: GPs being the focal point, inclusion i s viewed &om two
different perspectives: inter and intra GP. Given the project's demand-driven self-selection
processes, GP prioritization criteria are drawn such as to ensure that GPs encountering greater
`degree o f difficulty' are not left out. To promote `participation' by SC communities, and in
hilly,border and floodprone areas, special rules o f engagement havebeendrawn. Once a GP is
selected, all households within a GP will have an equal opportunity to participate in, and derive
benefitfrom the project. Beneficiaries will be able to be represented ina village-based institution
GPWSC. As the women bear greater responsibility for `water supplies', their role needs to be
emphasized and supported. Issues relatedto gender, ingeneral, andwomen, inparticular, will be
given special emphasis to ensure full opportunity for the involvement o f women at all levels in
all activities inthe project. Capacity buildinginitiatives will underpin gender and development as
one o fthe major themes.
89. Decentralization and Subsidiarity: The program will aim at decentralizingon a significant
scale RWSS service deliveryto the GPs and communities. This will bepremised on the principle
o f `subsidiarity' viz., that a particular decisionl activity will be made/ take place at the lowest
most appropriate level. Accordingly, GPWSCs will, in most cases, be the primary management
units exercising control over resources and decision making. To ensure ownership and effective
participation, every village will be enabled to prepare a PRA/SARAR-based community
development plan - GPWSC Plan. This will form an attachment to a Memorandum o f
Understandingto be signed among GP, GPWSC and District Program Management Cells and
will outline role and responsibilities o f all the three players along with fund flows/management.
21
This will constitute not only the basis for implementation, but would also enable comparative
assessmentsinfuture.
90. Capacity Support/Buildinq: To provide capacity support to the GPs and GPWSCs, and in
turn build their capacity, the program would enlist the services o f non-government support
organizations (SO) and or Village Support Teams (VSTs). The latter will comprise some
development entrepreneurs including GP chairperson, educated youth and other opinion leaders,
and complemented by the skills o f a Jr. Engineer. The designated functions include: awareness
creation, mobilizing communities and assisting the communities in the preparation and
implementation o f community development plans, conducting andor facilitating in capacity
building, liaison with GP and other agencies. Initially, SOsl VSTs will be strengthened to allow
themto undertake capacity buildingo fthe communities.
91. Change Management: It is recognized that success depends upon the program's
effectiveness inbringing a `change' in thinking and action among the government engineers. A
number of capacity building interventions will be designed, piloted and institutionalized to
achieve such a change, including observation study tours, stakeholder workshops, and programs
covering: management by objectives, leadership and team building, conflict management etc.
92. E:Toachieveachangeinmindsetsandenablecapacitybuilding,theprogramhas
recruited consultant services which have identified key messages to be communicated and the
various tools for improving communications, including, interpersonal tools, and extensive use o f
print andelectronic media.
5. EnvironmentalAssessment
Environmental Category: B (Partial Assessment)
93. The EA study indicated the following baseline environmental issues affecting the water
supply and sanitation situationinthe state:
(a) Water Availability: Shallow groundwater has traditionally been the major source o fwater
for drinking, irrigation and industrial uses in Punjab. Owing to large-scale extraction o f
groundwater, the shallow aquifers in large parts o f Punjab are in a state of over-
exploitation, resulting in a significant ongoing decline in groundwater levels. For a large
number o f rural households, which are not covered by public water schemes and which
are dependent on private sources like the shallow hand-pumps or tube-wells, the
declining groundwater levels have adversely affected the water supply. However, the
water for public piped water systems is sourced from the deep aquifer layers, ranging in
depth from 75m - 335m. This water supply for drinking water from the deep aquifer i s
considered abundant from the perspective of ensuring long-term source sustainability.
About 20% o f the water supply schemes in Punjab are based on canal-water supply, and
in some cases the water supply is adversely affected during the periods of canal
maintenance shutdown.
22
(b) Water Quality: According to DWSS estimates, about 44% o f the total 12,278 villages in
Punjab suffer from poor water quality conditions, with salinity, nitrate and fluoride being
the keyproblems.Due to its higher depth and relative hydro geological isolation from the
shallow aquifer, deep groundwater is expected to be free from the presence o f
bacteriological/chemical contaminants.
(c) Environmental Sanitation: 49% o f the rural households in Punjab have household
sanitation coverage, and the main factors affecting the status o f sanitation in the villages
are improper drainage of household wastewater without adequate arrangements for
treatment and disposal, effluent overflow from septic tanks and deteriorating water
quality inthe village ponds.
EnvironmentalManagement:
94. An environmental management framework (EMF) prescribing the requisite measures to
addressing these issues has been developed. These include:
95. Water Availability: Piped water systems will draw water only from deep aquifers. The
current and expected future drinking water abstractions from these aquifers are very small
compared to the estimated sustainable yield o f the deep aquifer, and therefore source
sustainability for deep groundwater-based schemes is ensured. In areas where deep aquifers are
saline, canal-based schemes will be implemented, and adequate year-round supply will be
ensured through storage or other measures.
96. Water Oualitv: Due to its higher depth and relative hydro geological isolation from the
shallow aquifer, deep groundwater is expected to be free from the presence o f
bacteriologicaVchernica1contaminants. Conventional water quality parameters for DWSS's deep
groundwater-based schemes indicate acceptable water quality for drinkingpurposes. However, in
view o f the traditional emphasis on shallow groundwater quality and due to emerging concerns
regarding possible presence o f industrial or agricultural chemicals in some locations, the project
will commence and support a systematic assessment o f deep groundwater quality in the state.
Effective and regular disinfection, preventive and corrective maintenance o f water distribution
systems and regular water quality testing and control will be ensured.
97. Environmental Sanitation and Hygiene: The project will support IEC campaign to create
and enhance awareness on hygiene aspects pertainingto hand-washing, water collection, storage
and handling practices; and to generate demand for drainage improvement schemes including
small-bore sewerdsewerage schemes andvillage ponds rehabilitation.
23
6. Safeguard Policies
Safeguard Policies Triggered by the Project Yes No
EnvironmentalAssessment (OPBP 4.01)
[I
X [I
Natural Habitats(OPBP 4.04) X
PestManagement(OP4.09) [I X
CulturalProperty(OPN 11.03, beingrevisedas OP 4.11) [I X
Involuntary Resettlement(OPBP4.12) [I X
IndigenousPeoples(OPBP 4.10) [I X
Forests(OPBP 4.36) 11 X
Safety ofDams(OPBP 4.37) [I X
ProjectsinDisputedAreas (OPBP 7.60) [I X
ProjectsonInternationalWaterways (OPBP 7.50) [I X
Piloting the Use ofBorrower Systemsto Address Environmentaland
SocialSafeguardIssues inBank-SupportedProjects (OPBP 4.00) [I X
98. Projects on International Waterways (OP/BP 7.50): Based on a technical
consideration o f the proposed project interventions, the hydro geological characteristics o f the
deep aquifers, the state policy on provision o f canal water, where needed, for rural water supply
schemes, and in the context o f the Bank's determination o f the applicability o f OPBP 7.50
(International Waterways) on a case-by-case basis, it has been determined that the proposed
project activities do not trigger OPBP 7.50. This determination i s based upon the provision that
no bore-wells will be installed within 1 km o f the line demarcating the international border
between India and Pakistan. See Annex 10 for detailed information.
Safeguards - Social
99. No lands will be acquired involuntarily and hence OP 4.12 is not triggered. So is OP 4.10
as there are no tribal (indigenous peoples) settlements in Punjab. The project, however, does
needlands and mechanisms o f securing the same are described inAnnex-10.
7. Policy Exceptions and Readiness
100. There are no Policy exceptions to be sought from the management.
101. Formal GoP approval o f the proposed project concept and design including adoption o f a
SWAP, and the cost recovery and institutional reforms to be implemented under the project, has
been accorded inthe letter o f July 12,2006 from the Chief Secretary, GoP. The Go1line ministry
has endorsed the GoP proposal to adopt a consistent sector policy, fiduciary processes,
implementation arrangements and a common M&E systems for all sources o f financing
including its own Centrally sponsored schemes. M&E indicators and institutional arrangements
for M&E have been developed and agreed. The planningphase o f the pilot batch covering 90
GPs (estimated budget: US$ 8 million) is nearing completion. Selection o f GPs for the first batch
o f another 500 villages has been initiated. The institutional arrangements have been agreed and
the State level Project management Cell is already under operation and all the 19 DPMCs have
been set up. A range o f Operational manuals - including fiduciary, technical and environmental
management have been finalized. The procurement plan for the first 18 months o f
implementation has been finalized. A range o f Government orders have been issued formalizing
various institutional and implementation arrangements and these have been included in the PIP.
All disclosure requirements have been met. Overall the project meets criteria for readiness for
implementation.
24
Annex 1: Country and Sector or ProgramBackground
INDIA: PunjabRural Water Supply and Sanitation Project
1. Access to Water Supply and Sanitation: There are two sources of information for
assessing the coverage o f water and sanitation in Punjab, as in most other states in India: a)
household survey based information from the Census of India (using the results reported in
Household Tables) and from a Demographic and Health Survey (DHS); and b) facility inventory
linked information as from the GoI-led Habitation Survey. While the household surveys provide
greater clarity on household access, the habitation survey provides supply side information that
has generallybeen used for planning and find allocation.
2. Based on the supply-side information from the 2003 habitation survey, as illustrated in
Table 1, only about 30 percent of the habitations were FC implying that they had water supply
levels o f at least 40 litres per capita per day (lpcd). Another 37 percent o f the total 14600
habitations were PC with a level o f supply 20 to 40 lpcd. The per capita levels inthis survey are
arrivedat by dividingdesign supply quantitybytotal population with potential access rather than
those actually served. As the habitation survey considers only public schemes as acceptable
sources, it does not capture the access to own private sources o f water supply on which a large
proportion o f the population in Punjab survives. For example, results from 2001 Household
surveys reported in Table 2 provide a different picture o f very high level of access to water
supply within the house (82%), and o f these mainly through hand pumps (84%) and some
through taps (12%). The 1998 survey showed similar results. However, in many parts o f the
state, hand pumps do not provide safe and potable water due to increasing pollution o f ground
water. Thus, it i s necessary to expand the reach o f piped water supply schemes and to enhance
their sustainability. Sanitation, however, lags behind with at least 60 percent not having access to
toilets.
> Fully covered Partially covered Notcovered Total
Number YO Number of YO Number YO Number of YO
Period Habitations of habitations of habitations
> . habitati habitatio
ons ns
2003 Main habitations 3716 30 4525 37 4026 33 12267 100
Source: 2003: based on the Habitation Survey by DWSS; 2006: compiled by DWSS using information on additional schemes
completed.
25
boreholes
Other 1.1 No facility 67.6
Total 100.0 Total 100.0
4. Two recent decisions o f the GoP andtheir related implementation over the past few years
have started to introduce some key changes: a) transfer o f SV water supply schemes to GPs, and
b) curtailing all new recruitment which has resulted in introducing private contracts for
operations o f all new WS schemes.
5. Sector Financing: Table 3 provides details o f main sources o f investment financing for
new schemes, which mainly include: a) state government's own resources (from MNP),b) Go1
budget allocations through plan schemes (such as ARWSP, Swajadhara and TSC), and c)
borrowing by GoP f'rom NABRAD under its Infrastructure Rural Development Fund(IRDF). In
recent years GoP has significantly increased investments in the sector with the annual outlays
reaching nearly Rs.200 Crore over the past two years. RWSS investments are at times also
mobilized through other sources at district level using general rural development type o f funds,
these are not reportedto be significant.
6. Fundingo f operation andmaintenance (O&M) o frural water supply is meant to be done
mainly through user charges, and GoP has introduced and implemented regular revision o f user
charges. Despite that, the total estimated billing levels are only about 25 percent o f total O&M
expenditure o f about Rs.770 million per annum for the state as a whole. This is due to low levels
o f household connections in existing public schemes, very high salaries for the operational staff
26
in the DWSS, as well as the lack of scheme level tariff determination. With the transfer o f SV
schemes to GPs, however, this situation is likely to change.
Source: Compiled by the DWSSbased on internal records.
7. Key Sector Issues: Current institutional and financing arrangements present constraints
and challenges in achieving service improvements and ensure long-term sustainability. In
addition there are some critical issues in environmental sanitation at the village level that affect
water quality andpublic health.
Scheme Operations andSustainabilityIssues:
Poor Water Supply coverage: This i s a two fold problem: (a) some 30 % o f the
habitations do not have access to public water system at all and are consuming unsafe
drinking water from private shallow bore wells with handpumps, and (b) the remaining
70 % villages having piped water system suffer from poor customer base with only 25 %
o f the households drawing water from these systems - mainly due to inadequate supply
capacity and/ or poor distribution management.
Poor communitv sanitation standards: most villages inPunjab have road side open drains
provided to cany household sullage water to village ponds outside the village for
disposal. Despite low quantities o f water supply from public water systems, these sullage
drains carry significant waste water quantities due to waste water generated from high
level o fprivate water sources used by households. Further, a good number o f households
have toilets with septic tanks and its highly charged effluents (high BOD and low DO
levels) i s let out into these open drains creating cess pools in the drains and disposal
ponds. All this coupled with poor regime o f drain cleaning is contributing to poor
environmental conditions inthe village and a serious health hazard.
Poor O&M management standards: low distribution pressures, very short durations o f
supply (about 2 hrs per day), highly skewed distribution o f available water amongst the
households, leakages and wastages, erratic power supply, inadequate O&M budget to run
standby diesel generating sets, and a large number o f illegal private connections, are all
resultinginto low O&M standards and poor customer satisfaction.
27
(d) Poor O&M cost recovery: Despite a reasonable tariff structure, the Statewide O&M cost
recovery is only about 20%. On one side the O&M expenditures are high due to high
salary levels o f DWSS operating staff, high power tariff and high number o f operating
staff per 1000 connections. On the other side, revenue is paid only by the 10% o f the
households who have private connections, while those drawing water from public stand
posts do not pay any water charges at all (though official tariff is Rs.15 / month per
household for PSP users).
(e) Poor accountability and incentive structures: The DWSS at the policy and higher
management level rarely, if at all, are demanding accountability for poor quality service
at the household level or for poor cost recovery. The attention o f DWSS higher level
management is focused on new constructions and capital expenditures and gets itself
involved in review, approval and clearances o f routine scheme engineering designs and
bid award decisions o f values as small as Rs.2 lakhs (US$4500). Thus there is a need for
the higher level management (SE and above) to delegate approvals o f routine designs,
tenders and works contract management to the lower levels, and focus its own attention
on monitoring and improving the quality o f service delivery on the ground, and ensuring
customer satisfaction.
9. Institutional and Sector Finance Issues:
(f) Lack o f separation o f different roles: For delivery o f rural water supply services the
DWSS currently combines all h c t i o n s and roles ranging from policy/ planning and
investment decisions, regulation, monitoring, design/ implementation and operation/
maintenance o f water supply schemes - without adequate separation within the
organizational arrangements. This makes it difficult to have effective monitoring and
regulation inprovision andoperations.
(g) Limited decentralization and local capacities: Despite their professed role, GPs currently
play only a limited role in provision o f RWSS. There has also been limited success in
implementing Swajaldhara with very low capacity o fPMs and low GoP Priority at policy
level to support decentralization. At the same time, there are some good examples from
the field with better results that need to be drawn upon in scaling up and building
panchayat capacity. Also, while the GoP has taken a major policy decision to transfer all
SV schemes to GPs, its fill implementation needs to be accelerated and backed by
capacity building support.
(h) Fragmented sector finances: Current system o f financing through a number o f different
sources results in simultaneous implementation with different and conflicting rules
through different programs in neighboring areas. This leads to different programs
undermining each other, adversely affecting demand driven approaches requiring cost
sharing byusers (as inSwajaldhara Schemes).
28
(i) Highly centralized decision-making and approvals: The current process of design
approvals i s centralized with almost all technical approvals reaching the office o f chief
engineers. Current practices result in a majority o f decisions being made in a very
centralized manner at the headquarters. This is true even for smaller SV schemes and it
affects efficiency in the use o f resources. This process needs to be decentralized to
DWSS division offices and GPs to improve efficiency and avoid unduetime delays.
6) Weak monitoring systems: On paper there is monitoring o f inputs, outputs and outcomes
through different systems. However, input and output monitoring is fiagmented by
sources o f finance makingit difficult to have an aggregated state level sector assessment.
Further, a lack o f reliable household level assessment o f outcomes makes it difficult to
realistically assess whether sector goals and targets are being achieved. While there is
some follow up on the implementation o f new schemes, focus on financial aspects o f
O&M o fwater supply schemes is generally missing and the scheme performance is never
monitored. Recent studies on performance monitoring conducted by DWSS do suggest
that such efforts on a regular basis to assess performance and sustainability would be very
usefulinidentifying measures to improve service delivery.
29
Annex 2: Major related ProjectsFinancedby the Bank and/or other Agencies
INDIA: Punjab RuralWater Supply and Sanitation Project
Sector Issue Project Latest Supervision(PSR)Ratings
(Bank-financedprojectsonly)
Implementation Development
Progress(IP) Objective(DO)
SecondMaharashtra RWSS MS MS
(ongoing)
Kerala RWSS (ongoing) S S
SecondKamatakaRWSS(ongoing) S S
UttaranchalRWSS (ongoing) NIA NIA
I
KarnatakaRWSS (closed) OED Rating- Satisfactory
Uttar Pradeshand Uttaranchal RWSS OED Rating- Satisfactory
(closed)
Maharashtra RWSS (Closed) OED Rating - Marginally
Unsatisfactory
AP DPIP (ongoing) S S
Initiatives Project RajasthanDPIP (ongoing) S S
i Madhya PradeshDPIP (ongoing) S S
Watershed KarnatakaWatershed (ongoing) S S
Development UttaranchalWatershed (ongoing) S S
UrbanWater Supply Madras WSS (closed) OED Rating- Satisfactory
and Sanitation Tamil NaduWSS (closed) OEDRating - Marginally Satisfactory
OED Rating- Satisfactory
Kerala WSS (closed)
Gujarat WSS (closed) OED Rating- Marginally Satisfactory
HyderabadWSS (closed) OEDRating- Satisfactory
Kamataka UrbanWater Sector S MS
Improvement (ongoing)
DFID Maharashtra RWSS Closed
DANIDA State projects inKarnataka, Orissa, Closed
Tamil Nadu, Kerala
TheNetherlands State projects inGujarat, Up,AP, Closed
Karnataka, Kerala
30
Annex 3: ResultsFrameworkandMonitoring
INDIA: PunjabRuralWater Supply and SanitationProject
1. MonitoringandResultsFramework
ResultsFrameworkMatrix
PDO IOutcome Indicators Use of outcome Information
Assisting GoP in Ii)%ofhabitationsintheruralareasofthestate Assess achievement o f targets and
increasing access o f (and each district) who are FC determine whether program
rural communities to ii)%ofruralhouseholdsinthestate(andeach strategy and implementation plans
improved and district) with access to safe and adequate water are working
sustainable RWSS throughout the year
services iii)%ofparticipatinghabitationswith
satisfactorily performing community sanitation
IntermediateResults I ResultsIndicatorsfor EachComponent Use of ResultsMonitoring
ComponentOne: Progr rnManagement
Capacity o fkey sector iv) Participating habitations for new schemes L o w levels would indicate the need
institutions ( 9 s wing under SWAP as a % of total habitations with a NC to review projected demand,
o f DWSS, SPMC and or PC status (cumulative habitations covered) demand mobilization strategy,
DPMC) and other v) Participating habitations for performance funds flow, procurement and
Support Organizations improvements of existing SVIMV schemes as a % expenditure approval procedures
built infacilitating of total habitations planned to be covered
demand responsive and (cumulative habitations covered)
decentralizedservice vi) % o fresources disbursedto GPs that are
delivery inPunjab utilized intime
Capacity o f GPs and vii) % o fparticipating GPWSCs with hghor Assess prospects for sustainability
GPWSCs built inRWS mediumrating for operational sustainability o f and whether program design is
service delivery their schemes working as intended. L o w levels
viii) % o fparticipating GPWSCs meeting the full would indicate need to strengthen
O&M costs throughuser charges capacity support mechanisms and
ix) % o fparticipating GPWSCs o fMV schemes IECactivities for GPs/GPWSCs
with a billing to collectionratio o f>90% for bulk duringplanning, implementation
charges andO&Mphases
ComponentThree: Infr gtructureDevelopment
Water supply and x) % o fwater schemes under SWAP completed L o w levels would indicate need to
sanitation schemes built withm planned time and costs assess adequacy o f design,
I upgraded at xi) YOo fparticipating GPWSCs achieving planned procurement and construction
appropriate service improvements inexisting schemes under practices
construction quality SWAP measured 6 months after completion
standards and with xii) %ofnew community sanitation schemes
minimal cost and time completed within planned time and costs
overruns
2. Arrangementsfor ResultsMonitoring.The followingtable identifies frequency and
institutional responsibilities for data collection and reporting. Performance on outcomes and
intermediate results indicators would be included inannual Program Management Reports
prepared for the SWAP Program.
31
3. The main responsibility for monitoring will be with SPMC and DPMC. A Program
Operations Management Information System (POMIS) i s being developed which will be aligned
with the Financial Management Reporting system. POMIS will include: for each quarter
achievements o f physical output targets and financial utilization against planned annual budget
for each subcomponent, as well as annually outcomes and component-wise results indicators.
4. For other outcome and intermediate results the main data collection tools, as also
illustrated inthe following table, include:
Habitation survey (indicator 1):DWSS had carried out a habitation survey as per the Go1
guidelines in 2003. This will be updated towards the end o f the program (year 5) to
measure achievements and to provide a baseline for the next Program. It will be managed
by the SPMC and DPMCs. Necessary additions will bemade to the Habitation Survey to
also include community sanitation.
Sample household surveyfor access to and use of rural water supply services (indicator
2): Inorder to capture the household level information, a sample household survey will
be carried out with appropriate sampling plan to ensure state and district estimates.
SPMC will carry out a base line survey in the first year o f the program and repeat the
survey at mid-tern (year 3) and at program end (year 6) by outsourcing to independent
research/ consultancy organizations. This will capture access and use o f water for
domestic purposes andhousehold satisfaction.
GPWSC Habitation annual checklist and sustainability assessment (indicators 3, 7, 8,
and II):A simple checklist has been developed for habitation level information for
sustainability assessment for all participating habitations to assess operational
sustainability for water supply schemes and satisfactory performance for sanitation
schemes. This will be done once a year to generate the relevant intermediate results. The
quantitative information will be combined with PRA techniques for a rapid sustainability
assessmentina smaller sample o fhabitations ineach district.
GPWSC Report on SV schemes (C2/C3) (indicators 4, 5, 6, I O and 12): These reports
will bepreparedquarterly and annually.
DWSS Division Office MV Schemes Report (indicators 4, 5, 6, 9, 10 and 12): These
reports will be prepared quarterlyand annually.
32
I 4
.r
ee
i
.r
c
5e m
m m m
m
c
i m
N m
0
P m
i m
b m
W m m
0
c N
I:
U
r- 0
b
eerb
ab N
.-C
z"
c
Annex 4: DetailedProjectDescription
INDIA: PunjabRuralWater Supply and SanitationProject
1. The SWAP Programwill have three maincomponents: Component A: Program
Management,Component B:CommunityDevelopment and; Component C: Infrastructure
Building.
ComponentA: ProgramManagement(US$31.4 M)
2. Sub Component Al, Institutionalcosts (US$19.8M): This subcomponent will finance
the costs of setting up and operating the state level and district level Project Management Cells
(SPMC and 19 DPMCs). The investment costs will include procurement of computers, office
equipment and vehicles and a range of consultancies for technical assistance (such as for
program management, M&E, IEC, capacity building, audit, construction quality monitoring).
Recurring costs will include individual consultant staff salaries, all staff travel costs, and SPMC
and DMPC offices' administrative and operating costs. Costs o f DWSS head offices, circles,
divisions etc and staff of other government departments supporting the project activities will not
be financed from the program funds.
' 3. SPMC and DPMCs are not mandated for direct implementation and service delivery,
but would act as facilitating and support units to Operations wing o fDWSS, GPs and GPWSCs.
SPMC and DPMC's composition, functions and operational procedures have been agreed as
indicated in the PIP. All these offices will be equipped with computers, office facilities, and
modem communication facilities and the professional staff would travel at least about 50% o fthe
time every month to the project GPs and villages. GoP would ensure that status o f SPMC and
DPMCs as approving (with SWSM and DWSCs), facilitating and monitoring units i s not
compromised and only those decisions are referred to GoP which do not fall in SPMC's
authority andmandate.
4. Subcomponent A2: Monitoringand Evaluation(US4.3 M):This subcomponent will
finance investment and operating costs of procurement o f goods, equipment and consultancies
for the Program's M&E system. The main activities through this subcomponent will include: (i)
the initial development o f a management information system and its operations to support
regular program implementation monitoring; (ii)two specific outcome monitoring surveys -
household surveys for state wide coverage and outcome assessments and statewide habitation
surveys; (iii)sustainability monitoring at habitation level using both community monitoring and
external sustainability assessment techniques; (iv) documentation o f good practices and periodic
state and district level sector performance reports; (v) best GPWSC awards on the basis o f
regular performance monitoring; (vi) setting up and regular operations o f the water quality
surveillance systems
5. The sub-component will help DWSS to set up sector information, M&E system focusing
both on program implementation monitoring as well as strategic monitoring to review program
performance inenvisaged outcomes related to the key development objectives. A monitoring and
evaluation fi-amework and strategy has been prepared along with a set o f golden indicators.
34
6. Water Oualitv Monitoring (US $2.2 million): The project will finance investment cost o f
goods and equipment for strengthening the existing laboratories and also supplying field testing
kits to GPs / GPWSCs. The recumng cost o fwater qualitytesting done through outsourcing(that
cannot be done by DWSS and outsourced) will be financed from the program. The cost o f
developing computerized water quality mapping and its regular updating will also be financed
from the Program. The Program will carry out water quality testing of 100,000 samples in the
state, over the project period. The testing will be more rigorous and regular in known water
quality problem areas (about 20% habitations) and by purposive sampling in rest of the
habitations. A detailed water quality monitoring and surveillance program has been designed -
which will be managed by SPMC. Responsibility for ensuring supply o f potable water to its
consumers will rest with the GPs/ GPWSCs for all SV water supply schemes and with DWSS for
MV schemes. SPMC will organize and manage independent water quality surveillance program
through private sector consultants/ laboratories. It is expected that this rigorous monitoring will
ensure that drinkingwater o f the requiredquality alone will be supplied to the rural population o f
the state.
7. Subcomponent A3: Capacity Building (US$4.0 M):This sub-component will finance
the costs of conducting 1,353 training programs designed under 44 modules: 6-Apex; 8-
Strategic; 16-Intermediary; and 14 Grassroots Programs. The costs will mainly cover
consultancy fees for resource institutions and resource persons; the cost o f designing and
multiplying training materials, and logistical costs of conducting the training programs
(infrastructure rentals, travel and subsistence for trainees, etc.). Overall, the project will
capacitate directly over 30,000 persons, a majority o f them will be athelow the district level.
This excludes capacity buildingo f the village communities, wherein another 60,000 persons will
be capacitated.
8. Capacity building (CB) needs o f each stakeholder group have been identified based on
learning requirements essential for performing their designated functions. Essentially, this will
enhance / develop knowledge, skills and management practices such as to bring in a change and
capacitate different stakeholders at different levels.
e Apex level -- C B will aim at creating an enabling environment for formalizing the
project's key principles and the targeted audience include administrators, policy makers,
political representatives andmedia.
e Strategic level -- target includes chiefly SPMC and other associated government
departments who are expected to promote and facilitate in campaigning and
mainstreaming the reform approach.
e Intermediary/Program level stakeholders comprise DPMC, DWSS, and consultants and
Support organizations, who are to provide technical, social andmanagement assistance to
grassroots level agencies.
e Grassroots/project level target encompass GPs and user groups who will be capacitated
such as to enable translate the project's approach into action -- designing, constructing,
operating andmanaging, andmonitoring the schemes.
9. The Capacity Buildingstrategy and details o f the specific programs have been developed
and a detailed CB plan has also been prepared. Key themes include: Change Management,
Decentralization, Public-Private Sector Partnerships, Gender, Equity & Empowerment, and
Technological Excellence. The main training areas include: (i) Management comprising
Change
team building, staff retreats, cross-visits and study tours and orientation programs at all levels;
35
(ii)Knowledge enhancement as well as Decision Making and Best Practice Management
programs at the village level; (iii) Engineering design and construction practices for engineers
and consultants; (iv) Procurement and Contract Management, enabling better handling of SOs,
consultants and contractors for project staff and GPWSC members; (v) Financial management
covering book keeping, accounting and audit; (vi) computerized financial management system,
M I S and M&E; and (vii) O&M management to ensure sustainability and equitable distribution
for GPWSCs and DWSS Engineers. Specific programs have been designed for technical and
institutional aspects o fMV water supply schemes.
10. Guiding Principles- All programs have been designed on the following principles: (a)
Participatory and field-based. Lecture mode will be as minimum as possible; (b) Ample
opportunities will be provided for learning and sharing; (c) Attention will be paid towards inter-
personal communication/ behavioral aspects such as motivation, leadership, team building,
conflict resolution, time management, and stress management. (d) Virtues like empathy for the
poor, SC/ST and women as well as mutual respect, learning to unlearn, careful observations,
mentoring and attentive listening will be emphasized in all the programs; and (e) Special
programs to address issues relatedto gender, Scheduled Castes and water quality affected areas.
11. Subcomponent A4: Information, Education and Communication(IEC) Campaign.
(US$2.0 M):The main aim o f this subcomponent is to enable the `project' to reach effectively,
and bring in a change among the stakeholders at different levels - state, district, block and
village. The campaign will help inaccomplishing three purposes. One, at the apex/ state level, to
ensure a `buy-in' from the public, in general, and in particular, from the policy makers and
administrators. At the intermediary (district/ block) level this will help inbringing a `change' in
management by the staff o f the DWSS. Grassroots purposes include: disseminating the project
rules and regulations, in general, and in particular, generating a demand for `potable water
supplies' and `sanitation'. For this purpose, DWSS undertook a `needs assessment' study which
together with media analysis, has enabled identifylngkey messages to be communicated and a
strategy to communicate the same. IEC will be implemented as a social marketing program and
specific activities to be funded include: (i)Establishment of a Media Resource Group, essentially
involving embedding media and other development professionals into the project; (ii) Designing,
printing and disseminating across the state a Community Newsletter; (iii) Creating a Brand-
Equity through high outdoor visibility; (iv) Designing and disseminating communication
materials through mass media - print, folk programs andthrough electronic media such as radio,
TV, cable network etc; and (v) Designing and adopting inter personal materials - brochure, flip
charts, manuals, stickers.
12. The village and community level sanitation and hygiene promotion (SHP) will be an
integral part o f the larger lEC campaign and would aim at promoting a `total health' perspective
by achieving sustainable and equitable health and hygiene benefits across the community
through improvements in water and environmental sanitation services. For this, efforts will be
made at: (i) enhancing awareness about the prevalence o f water pollution, its consequences and
possible mitigatory measures; (ii) fostering understanding o f complementarities between water,
sanitation and health; (iii) increasing awareness o f the benefits o f improved WS&S facilities; (iv)
creating a demandfor safe water and sanitation; and (v) strengthening local capacities for a self-
sustaining and gender sensitive sanitation and hygiene promotion program.
36
13. Subcomponent A5: Sector Development Initiatives (US$1.3 M): This subcomponent
will support the development and pilot testing o f new initiatives as they become relevant during
the medium-term program period. Initially, some initiatives have been identified including: (i)
strengthening the ongoing DWSS initiative for engaging private sector contractors for managing
WS operations; (ii)development o f district level water quality and resource maps; and (iii)
development o fbase topographical information on all participating habitations using total station
and engineering surveys.
ComponentB: CommunityDevelopmentSupport: (US$24.4 M)
14. This sub-component will mainly finance consultancy contract fees o f the Support
Organizations (personnel, other resources, travel, documentation, etc) towards their support
services to DWSS, GPWSCs and project communities and the incremental operating cost o f
DWSS staff (travel and incidental expenses but not their salaries and allowances) for providing
support to village communities. The DWSS staff will work with Village Support Teams and / or
SOs to provide single window assistance to GPWSCs and communities in technical, financial
and institutional aspects. Support Organizations equipped with social mobilization skills will
provide support in operationalizing the agreed participation framework. Roles and
responsibilities o f the key stakeholders (GPWSCs, SOs andDWSS), hnds flow and procurement
procedures will be captured in a tripartite agreement. In view o f increasing work load, the
DPMCs/ DWSS OPs wing will recruit engineering design consultants (firms/ individuals) to
assist GPWSCs and DWSS OPs wing in engineering design and construction supervision
aspects, on as neededbasis.
15. The main activities o f community development support will include: awareness creation,
community mobilization, preparing engineering designs for technology options, assisting the
GPs and GPWSCs to make informed decisions, assisting in procurement, construction
supervision andcontract management and inmanagement o fproject finds. DWSS staff and SOs
themselves will be capacitated initially to enable them to provide capacity support to their
clients. Towards ensuring inclusion and participation o f poorer GPs, a selection criterion with
highweightage to SCpopulation andthe other special conditions hasbeen agreed. The inclusion
at village level will be ensured by establishing GPWSCs, vehicles o f community participation,
bye-laws o f which provide for participation o f all the sub-groups. The different sub-components
are described below:
16. Subcomponent B1 (US$14.3 M): This sub component will mainly finance the contract
fees o f NGOs/ SOs providing village level social development and management support needed
for implementing Components C1, C2 and C3. This will be done by Village Support Teams or
by recruiting SOs to assist and work with the DWSS engineering staff in community
mobilization and organization type o f activities including: small workshops, focus group
discussions, information campaigns, and participatory community action planning for forming
the GPWSC and supporting its effective participation inthe planning phase o f the scheme cycle.
For component C2, the support activities will be o f shorter duration as the length o f the scheme
cycle would be less for already finctioning schemes.
37
17. Sub ComponentB2 (US$10.1M): This sub component will finance consultant contract
costs o f engineering design / construction supervision support needed (through consultants) for
implementingcomponents C1, C2 and C3. Agencies like Punjab State council for Science and
Technology will be recruited to prepare engineering designs for community sanitation schemes.
ComponentC: InfrastructureDevelopment:(US$205.6 M)
18. This component will finance works, goods and equipment for constructiod up gradation
o f water supply schemes in some 3000 NC/ PC habitations, rehabilitation and transfer o f intra-
village water systems in some 1600 habitations, and a few pilot projects o f Reverse Osmosis,
defluoridation, and portable water treatment plants. It will also finance works, goods and
equipment for sullage drainage and ponds rehabilitation in some 1000habitations and provision
o f underground small bore sewers / sewerage systems in 100 habitations. The three main sub-
components are described below:
19. Subcomponent C1: ConstructionKJpgradingof Water Supply Schemes in NC/PC
habitations(US$131.7M):GoP aims to achieve GoI's objective o f ensuring that all habitations
inthe state will reach a FC status by2012. Thus, this sub component will finance water supply
schemes (new/ upgrading) for the remaining 3000NC/ PC habitations inPunjab.
20. Traditionally, DWSS provides only piped water systems with two technology options:
Deep tube well based schemes drawing upon ground water sources and canal based schemes
drawing surface water from an extensive canal network - especially inthe districts o f Bhatinda,
Mansa and Faridkot where the ground water i s heavily polluted with high TDS, fluorides and
nitrates. Both technology options support either SV schemes or MV schemes when local water
sources are not o f acceptable quality or do not guarantee adequate quantity. However, MV
schemes in Punjab generally cover only about 2-4 habitations and are small enough for local
management by communities and GPs.
21. The SV tubewell based schemes will typically have a deep tubewell fitted with a
submersible pump, a pump house with disinfection unit, rising mains o f short length, Overhead
service Reservoirs (OHSRs) and small network o f PVC distribution pipes running along the
village roads. The water delivery points are either house service connections (with or without
consumer meters) provided based on demand and public standposts for serving the needs o f the
poor households that cannot afford installation and monthly tariff o f house service connections.
Water from deep tube wells being safe, only treatment provided is disinfection with chlorination
units or recently with silver ionization units. In view o f the erratic power supply fi-om the grid,
standby diesel generating sets will beprovided iftheir investment costs are fully financed by the
GP/ communities -especially because o f their higher operating expenditures that will have to be
subsequently borneby the users.
22. The MV tubewell based schemes will have similar scheme components, except that the
tubewell andthe OHSR will distribute water to 3-4 adjacent habitations- with independent feeder
mains to each habitation where needed for equitable distribution. The canal based schemes will
consist o f an outlet from the canal, a large water storage tank to hold water during canal closure
periods (about 2 weeks), a filtration plant and a clear water reservoir. Water from the clear water
reservoirs i s pumped into a common OHSR and distributed to one or more habitations - leading
to formation o fa canal based SV or canal based MV scheme.
38
23. About 80% o f habitations are expected to have ground water as source (tube well) and
remaining 20% would have surface water as source (Canals). Of the total 3000 habitations, some
1000 habitations are expected to be covered with SV schemes and the rest requiring MV
schemes. In some districts (such as Bhatinda, Mansa and Faridkot) water supply schemes will
need to rely on canals as the only source for pipedwater schemes (about 600 habitations out of
total 3000 habitations). Selection o f schemes will be done in a demand responsive manner at the
district level with priority for the NC, PC and quality affected habitations. Of the 3000 N C P C
habitations, schemes for some 1000 habitations are expected to be financed from GO1funding
andthe rest from Bank financed stream.
24. Subcomponent C2: PerformanceImprovementsin Existing Schemes (US$54.9 M):
Under the demand responsive approach the main focus is on ensuring the principle of
subsidiarity by havingthe management o f all SV schemes and intra-village components of MV
schemes transferred to the GPWSCs. In order to ensure sustained improvements in service
quality (quantity and quality o f water supply and its equitable distribution across all households)
this subcomponent focuses on supporting the transfer process through investments for
rejuvenation and service improvements. Each district has identified specific schemes and
preliminary investment requirements. It is expected that about 1600 habitations will be covered
underboth SV & MV schemes, benefitinganother 2.0 millionpopulation.
25. Specific activities to be funded include: (i) Rejuvenation (rehabilitation) and service
improvements (such as metering, zoning) measures linked to the transfer o f SV schemes to GPs;
(ii)Rejuvenation (rehabilitation) and service improvements (such as metering, zoning) measures
linked to the transfer of intra-village component o f the MV schemes to GPs; (iii) Provision o f
bulk water meters in habitations served by all the existing MV schemes; (iv) A district level
contingency fundto bemanaged by the DPMCs to meet any emergency requirements inGPWSC
or DWSS managed schemes. All the above activities will be covered under Component C2 (a),
estimated to cost about US$42.9 M.
26. Sub component C 2 (b) will finance installation o f defluoridization and reverse osmosis
plants and portable water treatment plants estimated to cost US $ 12 M. Financing o f this sub
component will be subject to condition o f satisfactory implementation and operation o f these
schemes inabout 5 habitations for each technology option over the first two years of the project.
27. Subcomponent C3: Community Sanitation (US$ 19.0 M): This sub component will
finance works, goods and equipment for construction/ up-gradation o f village drains and ponds
rehabilitation in some 1000 habitations. Inaddition, it will finance works, goods and equipment
for constructionof small bore sewer/ sewerage schemes on a pilot basis inabout 100habitations.
Since there is not sufficient expertise and experience in DWSS for such works, this sub
component financing will be subject to condition o f satisfactory implementation and operation o f
these schemes in about 5 habitations for each technology option over the first two years o f the
project
28. Under the proposed SWAP Program, the investment support to environmental sanitation
component will only be for community sanitation schemes, since the household sanitation is
already being implemented by GoP's Rural development department with financial assistance
from GoI's Centrally sponsored program (Total Sanitation Campaign).
39
29. The possible options for village drainage are: (i) drainage: provision o f open drains
Open
collecting only sullage water (except septic tanks effluent) without any treatment (not needed),
(ii)Conventional underground drainage /sewerage system with sewers and manholes connected
to both toilets and bathrooms o f houses and led off to a treatment plant for disposal (iii)
Small
bore sewerage system which is designed to receive only the liquid portion o f household
wastewater- connected to the septic tank or interception chamber which will carry effluent from
septic tank/ interception chamber (which retains solids) and led o f f to a treatment plant for
disposal.
30. DWSS will work out cost effective versions o f small bore sewers and conventional
sewerage schemes appropriate for implementation in selected villages. In either proposals the
designnorms will be: (i) use most economical pipe material either SWG, RCC, PVC or HDPE
to
with no restriction o f minimum size since smaller size o f sewers will result inhigher velocities
and will prevent silting, (ii)
treatment options to use existing ponds where available, (iii) to
not
include any household facility such as toilet, septic tank or interception chamber (which will
needto be financed from households). DWSSwill implement sewerage schemes in such villages
which have at least 70% coverage o f household toilets and disposal o f sewage will flow by
gravity.
31. Proposed MTP and SWAP Program: The component wise investment needs o f the
Proposed SWAP program and the allocations available for ongoing schemes included in the
MTP are summarized inthe next page.
40
Table :MediumTermSector Program:EstimatedInvestmentRequirement I n US$ Million
Component 2006- 2007- 2008- 2009- 2010- 2011-Total YOto
07 08 09 10 11 12 total
A ProgramManagement
A1 Institutional costs (SPMC, DPMC) 2.7 3.4 3.4 3.5 3.6 3.1 19.8 5%
A2 Monitoring and Evaluation 0.3 1.3 0.6 0.4 1.3 0.4 4.3 1%
A3 Capacity Building 0.4 1.0 1.0 0.6 0.6 0.4 4.0 1%
A4 ProgramIEC 0.3 0.3 0.3 0.3 0.3 0.4 2.0 1%
A5 Sector development initiatives 0.3 0.3 0.2 0.2 0.2 0.1 1.3 0%
Total- ProgramManagement 4.0 6.3 5.6 5.1 6.1 4.4 31.4 9%
B CommunityDevelopmentSupport
B1 Community SUPPOI? - SOS 0.4 0.9 3.8 4.0 4.5 0.8 14.3 4%
B2 Engineering Support 0.2 0.6 2.7 2.9 3.1 0.8 10.1 2%
Total- CommunityDev.Support 0.6 1.5 6.5 6.9 7.6 1.6 24.4 6%
C InfrastructureBuilding
C1 Constructioflp gradation o f Water 2.0 5.8 25.4 38.8 40.9 18.8 131.7 36%
Supply SchemesinN C P C habitations
a N C Habitations 1.7 3.9 21.2 31.5 30.7 13.4 102.3 28%
b PC habitations 0.3 1.9 4.3 7.3 10.2 5.4 29.4 8%
C2 Performance improvements inWS 1.8 6.2 15.1 13.6 9.4 8.8 54.9 15%
(a) Performance improvement in
existing schemesand transfer
1. Stabilizing transfer o f SV 0.2 0.5 2.8 2.8 3.1 2.2 11.5 3%
schemesto GPs
11. Transfer o f MV intra-village 0.4 1.o 4.2 4.9 5.4 5.7 21.6 6%
... components
111. BulkMetering inMV schemes 0.4 2.3 2.4 0.0 0.0 0.0 5.1 1%
iv. District levelcontingency fund 0.0 0.9 0.9 0.9 0.9 1.o 4.6 1%
(b) Pilot Testing ofNew Technologies 0.8 1.4 4.9 5.0 0.0 0.0 12.0 3yo
C3 Community Sanitation 0.8 1.3 4.1 4.2 4.3 4.3 19.0 5yo
a Constructioflp-gradation of 0.1 0.5 2.5 2.6 2.6 2.7 11.1 3%
village drains & Ponds
rkhabilitation
b Small bore sewerdsewerage 0.7 0.8 1.6 1.6 1.6 1.7 7.9 2%
schemes
Total - InfiastructureBuildinn- 4.7 13.2 44.6 56.5 54.6 31.9 205.6 57%
TOTAL SWAP PROGRAM
- 9.3 21.0 56.6 68.5 68.2 37.9 261.4 72%
OutsideSWAPProgram Committed- 41.9 39.4 20.7 0.0 0.0 0.0 102.0 28%
schemes
TOTAL -GoP MediumTerm Sector 51.1 60.4 77.3 68.5 68.2 37.9 363.4 100%
Program
Notes: Costs includeprice andphysical contingencies
Totalsmay not add due to rounding
41
Annex 5: ProjectCosts
INDIA: PunjabRuralWater Supply and SanitationProject
Table 1:Proposed SWAPProgram:Cost Estimate
I n US $ Million
Component-wiseBaseCosts Total SWAPProgram
A ProgramManagement
A1 Institutional costs (SPMC, DPMC) 18.0
A2 Monitoring and Evaluation 3.9
A3 Capacity Building 3.7
A4 ProgramIEC 1.9
A5 Sector development initiatives 1.2
Total - Program Management 28.7
B CommunityDevelopmentSupport
B1 Community Support -SOs 13.6
B 2 Engineering Support 8.5
Total - Community Dev. Support 22.I
C InfrastructureBuilding
C1 ConstructionAJp-gradationo fWater Supply SchemesinN C P C 112.5
habitations
C2 Performance improvements inWS
(a) Performance improvement inexisting schemesand transfer 37.0
(b) Pilot Testing ofNew Technologies 10.3
C3 Community Sanitation 16.2
Total - Infastructure Building I76.0
Base Costs TotalProgram
- 226.8
PriceContingencies 24.9
PhysicalContingencies 9.8
Total ProjectCosts 261.4
Interestduring construction 0.0
Front-endFee 0.0
TotalFinancingRequired 261.4
Note: Totalsmay not add due to rounding
42
Table 2: ProposedSWAPProgram: Component-wiseSources of Funds
I n US $Million
Component Total YOto Sourcesof funds
GOI yo GOP % Comm yo
Program SWAP GO1 GOP unity Comm
A ProgramManagement
A1 Institutionalcosts (SPMC, DPMC) 19.8 7.6 0.0 19.8 0.0
A2 Monitoring andEvaluation 4.3 1.6 0.0 4.3 0.0
A3 CapacityBuilding 4.0 1.5 0.0 4.0 0.0
A4 ProgramIEC 2.0 0.8 0.0 2.0 0.0
A5 Sector developmentinitiatives 1.3 0.5 0.0 1.3 0.0
Total - Program Management 31.4 12.0 0.0 0.0 31.4 100.0 0.0 0.0
B CommunityDevelopmentSupport
B1 CommunitySUPPOI? -SOS 14.3 5.5 0.0 14.3
B2 EngineeringSupport 10.1 3.9 0.0 10.1
Total - Community Dev. Support 24.4 9.3 0.0 0.0 24.4 100.0 0.0 0.0
C InfrastructureBuilding
C1 ConstructionAJp-gradationofWater 131.7 50.4 42.1 79.8 9.7
Supply Schemes inNC/PC
habitations
C2 PerformanceimprovementsinWS
a) Performanceimprovementin 42.9 16.4 0.0 39.5 3.4
existing schemes andtransfer
b) Pilot Testing ofNew 12.0 4.6 0.0 11.0 1.o
technologies
C3 CommunitySanitation 19.0 7.3 0 17.5 1.5
Total - Infastructure Building 205.6 78.6 42.1 20.5 147.8 71.9 15.7 7.6
TOTAL SWAP PROGRAM
- 261.4 100.0 42.1 16.1 203.6 77.9 15.7 6.0
Notes: *Bank will reimburse GoPS share of sector expenditure under the SWAP program up to the ceiling of US$154
M.
Totals may not add due to rounding
Table 3: Proposed SWAPProgram: ExpenditureProfileby Financiers
In US$Million
Source of Funding 2006- 2007- 2008- 2009- 2010- 2011- Total YOto
07 08 09 10 11 12 total
GovernmentofIndia 1.o 2.7 9.1 11.6 11.2 6.5 42.1 16%
GovernmentofPunjab (own fimds) 1.1 3.2 10.9 13.8 13.3 7.3 49.6 19%
World Bank 6.8 14.0 33.2 38.8 39.6 21.6 154.0 59%
community 0.4 1.o 3.4 4.3 4.2 2.4 15.7 6%
Total 9.3 21.0 56.6 68.5 68.2 37.9 261.4 100%
Notes: *Bank will reimburse GoP's share of sector expenditure under the SWAP program upto the ceiling of
US$I54 M.
Totals may not add due to rounding
43
Annex 6: ImplementationArrangements
INDIA: PunjabRuralWater Supply and SanitationProject
Organizationand staffing:
1. The institutional and Implementation arrangements have been presented in Section C2.
The organograms o f the overall institutional arrangements and that o f the SPMC and DPMC are
inAttachment 6 A.Furtherdetails are inthe PIP.
OverallImplementationSchedule:
2. The project will be launched from January 01, 2007 and close on March 31, 2012.
However, the expenditures incurred by GoP during its current fiscal year (April 2006 to March
2007) adopting the new sector policy and implementation arrangements (mainly the pilot batch
implementation) will be included in the proposed SWAP program. The overall implementation
schedule over these six years i s presented in one page Bar Chart in Attachment 6 B. Further
details are inthe PIP.
Village SelectionCriteria andProcess:
3. Process: The prioritization / selection process will be initiated by SPMC/ DMPCs with
support from OPs Wing o f DWSS, District Administration and NGOs ineach district through an
awareness campaign using both mass media as well as village to village canvassing. An
information pamphlet will be developed and disseminated to inform and encourage communities
to submit applications for project support. The pamphlet will include a concise description of the
project, rules and regulations governing participation, instructions on how to apply, and a sample
application template to be filled in by the applicant. Following this, the project will invite
applications from interested GPs. Applications will be called for once a year, before the
commencement o f each batch. Village level applications are analyzed at the district level and
submittedto the state. District recommendations are collated andreviewed at the state level.
4. Village Selection: Technically, all the villages that are willing to adhere to the stipulated
rules and regulations are eligible to participate in the program (except GPs where schemes are
currently ongoing or were completed during the past 3 years will not be eligible). To ensure
inclusion and targeting o f the most needy and disadvantaged population - a transparent selection
and prioritization criteria has been developed and agreed. The GP applications received will be
ranked ina descending order starting with GPs scoring maximummarks at the top. The Lists will
be prepared separately for each district and for each batch. Depending on the Program
implementing capacity for each batch and district a pre determined number o f villages at the top
o f the list will be selected. Applicant GPs will beprioritized based on marks assigned to: present
levels o f water supply (NCPC/FC); water quality affected habitations; extent o f scheduled caste
population; and past track record interms o f resource base (tax collection / revenue generation)
as well as development activities. Higher marks are assigned for NC/ PC villages and villages
having higher SC population and villages located in hilly terrain/ flood prone zones and those
along the international border. Prioritization and selection will be done separately for N C P C
and FC categories respectively in the ratio o f 70:30. Further, the population identified as
44
`disadvantaged' will contribute less to the capital cost, thus enabling their participation. The
details of scoring and rankingcriteria are inAttachment 6 C.
ProjectAppraisalCriteria
5. The schemes prepared by GPWSCI DWSS OPs wing will go through an independent
appraisal and approval by committees in DPMC and by DWSC. A detailed list o f Appraisal
criteria and check list have been developed and agreed. These include compliance with project
rules, techno economic feasibility and compliance with environmental and social safeguard as
well as fiduciary requirement. Proposals for capacity building arrangements as well
arrangements for post implementation O&M arrangements will also be reviewed. Towards
ensuring optimal designs, water resources management and intra- as well as inter-village equity,
capital cost ceiling norms will be adopted. For water supply, it will be Rs.15,000 per household.
For Community sanitation schemes, the same will be firmed up after getting a first hand
experience o fthe piloting.
User Cost Sharing:
6. Rules for user cost sharing towards investment and O&M costs have been agreed and the
details are inAttachment 6 D and inthe PIP.
Village LevelImplementationArrangements
7. -willbethegrassrootsinstitutionfortheprogramimplementation.However,astheGP
GP
consists o f only elected representatives and that it has other responsibilities too, a special purpose
vehicle, a Water and Sanitation Committee o f the GP (GPWSC) will be set up. The advantages
o f this are: one, it provides for participation o f non-elected representatives and two, it enables an
exclusive and dedicated attention to RWSS. However, the role and responsibility o f a GPWSC
depends upon the extent o f habitation coverage. In the case o f a scheme (s) developed for an
intra-Panchayat habitations, a Committee, GPWSC, will be the primary management unit and
will be responsible for planning, designing, procurement, construction and O&M as well as
management o f funds for all Programhabitations.
8. GPWSC shall be set up as a sub-committee under the Section 25 o f the Punjab Panchayat
Raj Act and provides for broad based membership, both elected and non-elected. The GP's
Sarpanch will be the Chairperson o f the GPWSC and will have 11- 21 members dependingupon
the village population, with a maximum o f 4 elected representatives. One third o f the members
shall be women and a fifth from Scheduled Castel Other Backward Caste. The non-elected
members will be chosen from Gram Sabha. The Junior Engineer o f the DWSS in-charge o f the
village will be the technical member cum convener ofthe GPWSC.
9. GoP has prepared a model byelaw which makes explicit the role and responsibilities as
well as functions and powers o f GPWSC as well as the linkages with GP and other institutions.
Essentially, a participating GP will set up the committee through a resolution and empower them
to perform RWSS functions on its behalf. The details o f GPWSC composition, functions and
powers are elaborated inthe PIP.
45
10. Scheme Level Committee: Inthe case of MV water supply schemes, where inthe scheme
spreads across several GPs and requires higher engineering skills, it is thought fit to establish an
apex body, Scheme Level Committee (SLC), comprising representatives of participating
GPWSCs, to address issues related to the common facility viz., inter-village service delivery. It
is proposed that the DWSS, SLC and GPWSCs will be the partners in a MV water supply
schemes. DWSS will be responsible for overall planning; construction o f common facility as
well as providing technical assistance to SLC for its O&M. GPWSCs will manage intra-village
activities. SLC will oversee the planning and construction, and subsequently, operate and
maintain common facilities and provide water to GPWSCs on a bulkbasis.
11. Village Support Team (VST): A rapid SO capacity assessment study indicates that
Punjab does not have locally adequate number o f quality SOs to meet the project's full
requirement. To address this, the project has proposed the concept of a village support team
(VST). This i s a team comprising GP/ GPWSC representatives, local youth and the Junior
Engineer o f the DWSS, who would be trained specially as a team to undertakethe community
mobilization responsibility. Thus, VST will be a local level citizen body, transformed into a
grassroots institution which shall perform the role o f a SO. It will chiefly be responsible for
capacitating and institutionalizing GPWSC.
Support Organizations(SOs)
12. Typically, three types o f SOs are expected: (i) providing community mobilization
those
and institutional support (SO-CD); (ii) SO-Eng, providing technical support; and (iii) SO-Mgt,
providing management support. Insuch situations where the project finds difficult to secure SO-
CD, then, the concept of Village Support Team (VST) will be adopted.
13. SO-Mgt will be chiefly consulting firms and/ or individual consultants deployed for
providing Management Support to SPMC andDPMCs insteering the program as the DWSS will
take time in building the required (non-engineering) skills internally. They would provide
experienced personnel inmanaging community development interventions, as well as monitoring
and evaluation including process monitoring and impact assessments. They will: (i) Support
Program Director in developing and guiding implementation of capacity building, IEC, and
communication; (ii) Assist the Program Director inthe preparation o f progress reports as well as
inconsolidating the key learning,document the same and disseminate it statewide; (iii) in Assist
developing and disseminating alternative mechanisms to reach and work with the communities,
viz. participatory management techniques and methodologies; (iv) Drawing strategies and
implementation action plans for transparency, inclusion and accountability; (v) Designing and
adopting change management approaches, in particular, and capacity building, in general; and
(vi) Designing, rollingout andmaintaininga web site reflecting status andprogress inthe RWSS
sector in the state. It is expected that the DWSS will acquire/ learn the non-engineering skills
within 2-3 years and thereon the same will be managed in-house by DWSS. SO-Enq will
supplement/ complement chiefly the OPs wing o f DWSS in areas such as total station survey,
design engineering, water quality testing, construction quality surveillance etc.
46
Scheme/TenderApprovals
14. Whereas the overall annual plan approval (equivalent to administrative approval) rests
with SWSM, most technical sanctions as well as Implementation Phase Proposal approvals are
devolved to the district level. Similarly, a majority ofthe scheme tenders' acceptance i s devolved
to the Village level. The District Annual plans for each year will be prepared by DWSC and
approved by GoP/ SWSM before the end o f the previous fiscal year and included in the state
budget. This plan will have names o f villages selected and line estimates only and it will be
administratively approved by GoP before beginning o f the next fiscal year. Thereafter, approvals
o f all detailed scheme reports and tender award decisions upto Rs.30 lakhs will be taken by GP/
GPWSC per scheme or tender for SV schemes and by DPMC for common infrastructure o f MV
schemes. SPMC will be responsible for approval o f schemes and tenders o f higher values.
Procedures and powers at various levels for such approvals have been detailed in the
Procurement Manual.
ModelAgreements/MOUsetc
15. Towards operationalizing the proposed institutional model, the following instruments
have been prepared: (i) Undertaking Note - reflecting a GP's demandfor and willingness to
GP
participate in the program; (ii) Village Selection -- Eligibility criteria and village prioritization
processes; (iii) GPWSC bylaws, defining its composition, role and responsibilities; (iv) Tripartite
MOU to define relationship among DWSS, GPWSC and GP; (v) Scheme Cycle - Single and
MV schemes along with responsibility matrix; (vi) Scheme Cycle - Scheme Transfers and
Sanitation; (vii) Scheme Level Committee - byelaws, defining its composition, role and
responsibilities; (viii) Quadrilateral MOU - outlining the role and responsibilities o f the
MVWSS partners, GP, GPWSCs, SLC and DWSS; (ix) Scheme (DSR) appraisal criteria - a
brief check-list enabling appraisal from social, economic, institutional, environmental and
technical perspectives.
CommunityDevelopment(Scheme) Cycle(CDC)
16. GoP has developed different scheme cycles corresponding to different time frame (and
technological options) as found suitable to the communities. Typically, while, a SV ground water
based scheme cycle will be o f 21 months duration, it will be 24-30 months for MV and other
surface source based water supply schemes. In both the cases, a preliminary plan will be
prepared within a period o f two months, to decide on activities: (a) requiring urgent attention
(repairs/ replacements); and (b) those requiring elaborate planning. The latter will be visualized
in four distinct phases: (i)pre-planning; (ii)planning; (iii)construction; and (iv) post
construction O&M. Separate Scheme cycle has been developed for SV and MV water supply
schemes (included in the PIP). It describes the sequence o f activities, processes,
success/performance indicators, and roles and responsibilities o f the key actors. A key principle
o f the proposed CDC is that it defines milestones which need to be achieved at the end o f each
phase and will serve as performance indicators or triggers to move from one phase to the next
one. Inorder to keep track o f the quality o f the CDC implementation process and successful
achievement o f the end o f the phase milestones, the entire process will be closely monitored.
47
Outputs duringthe Scheme Cycle
17. DWSS-OPs Wing, SOs, GP/ GPWSCs will work together and generate the following
outputs inthe Planning, Implementation andPost-implementationPhases.
PlanningPhaseOutputs
0 Amee to Do Report (ATD) -initially IEC andmobilization efforts culminating in
village agreeing to participate hrther in the program. These include: community
mobilized - Gram Sabhas held, GPWSCs formed, GP / WSC members trained,
WSCs bank account for capital cost contribution and O&M opened, Project bank
account o f the GP opened, capital cost contribution plans developed and initiated;
Baseline survey conducted, Social / Resource mapping done to depict the
existing situation and to identify gaps (if any), choice o f technology discussed
with DWSS, proposed sanitation plan discussed, existing water supply and
sanitation plan recorded, necessary assistance provided to DWSS to prepare
Preliminary Scheme Reports (PSRs), GP level Agree-To-Do (ATD) meetings
heldandATD report submittedto DPMC through DWSS.
0 Implementation Phase Proposals: A number o f Community Action Plans (CAP)
together will constitute an IPP that will be reviewed and approvedby the DWSCs.
These include : Water supply development Plan, capacity buildingplan, Women
development Program Plan, Capital cost user contribution plan, O&M Plan and
Communities' own M&Eplan
Implementation/ Construction Phase Outputs
0 Award o f Contracts - procurement o f workshervices through prescribed
contractingprocedure (tenders invited, tender evaluation done, contract awarded).
0 Community Action Plans (CAP) implementation.
0 Implementationmonitoring and quality assurance.
0 O&M Planrefined.
Post-Implementation Phase Outputs
0 O&M Plans firmed up on all aspects-technical, institutional and financial.
0 O&M Budget worked out, tariffs fixed and mechanisms for tariff collection put in
place.
0 Conduct refresher training programs for the members o f GPs and GPWSCs.
0 Scheme stability support to GPs and GPWSCs.
0 O&M back up support to the user communities.
a Assisting GPs and VWSCs in conducting sustainability monitoring exercises for
the completedschemes.
0 Follow up on disinfection methods, residual chlorine indicators & healthy home
surveys, etc.
48
I'rovidc pxtltcyguide[irrcs
.................................................................................................................... I, 1
....................................................................................................................
:erSmnitationCommittee
.........................................................
...................................................................................................................... ...................................................................................... ...................................................
r-zG anchaynt
*
A
x
~
GI'WIIISC
Sub Committce of GP (Sec.25) I_
I
i I
1
Rf&E Unit
I i
I
t
I I
+......................
.I1 !1111 I!
Annex:6
Attachment 6 B
I
III II II 1I I
Annex: 6
Attachment 6 C
Village Selection
Rankingand Selection Procedures
1. GoP (SPMC) will place an advertisement in the local daily newspapers prior to the
commencement o f each batch, informing o f the project and seeking an expression o f interest
from the willing GPs. Simultaneously, SPMC will also write individual letters to all the GPs
along with a copy of the advertisement. As far as villages wherein SV schemes have been
already transferred to GPs (about 876), DPMC will support their rehabilitation and complete the
transfer processes. These villages neednot apply.
2. Applications will be obtained from GPs in a standard form prescribed by SPMC which
will include assurances regarding GPs commitment to adopting project's cost recovery and other
administrative rules. Subsequently, each GP will be rankedbasedon the following criteria.
I Quantity of Quality
Criteria water water Implementation Efficiency
availability availability
Indicators N PC F Fluori Othe 240% 40% - <25% >60% >lo% of the
I C C de r s 25%
I I Utilization total Revenue is
ofplan From Own
/PTDS I funds IResources
Score ( 3 5 120 1 5 ( 3 5 II 10 I15 10 1 5 I110 ( 5
Selection Process
3. Once the rankings are done, GPs will be arrangedin a descending order and the toppers
will qualify for self selection on a priority basis. Towards ensuingadequate geographical spread,
rankings will be done district wise. This district wise ranking will be reviewed and finalized by
SWSM. Subsequently, toppers will qualify for participation. Actual selection inany batchwill be
made by the SWSM taking into account, resources allocated for different districts,
implementation capacity and ensuring that needy ones do receive priority. District wise
prioritization list as well as the final batch wise selected list will be put on website as well as
shared with the district administration, and all relevant line departments. Prioritization and
selection will be done separately for N C P C and FC categories respectively inthe ratio o f 70: 30.
The process o frankingo fGPs will be carried out at the commencement o f eachbatch.
GPsNillages not Eligible
4. Such villages who have had the financial assistance for a water supply scheme from the
state in the last 3 years or those villages where implementation of water supply schemes i s in
progress (mainly NABARD assisted and ARWSP & Swajaldhara Schemes) will not be eligible
to participate inthe program.
52
Annex:6
Attachment 6 D
User Cost SharingRulesand Procedurefor Administration
1. Capital Costs. As an expression o f their commitment to participation and ownership in
the scheme, beneficiaries will contribute to the capital cost o f the scheme. While the program
will follow the GoI's Swajaldhara principle o f 10%contribution from the users, relaxations have
been made for some communities taking into account the socio-economic and geo-physical as
well as spatial differentials. Some 1,500 habitations (a little over 30% o f the total) are expected
to bebenefitedout o fthis discounting.
2. O&M. The O&M cost for all SV schemes will include electricity charges, chemicals, oil
and lubricants, staff for O&M, and insurance charges for source sustainability where applicable.
O&M cost for MV schemes will in addition, include bulk water charges payable to DWSS on
volumetric basis at tariff fixed by DWSS for such supplies. Detailed cost sharing rules are
enumerated below:
WATERSUPPLY Cost Sharing Remarks
IO&M Yo of
A. WATER SUPPLY total Costs
1. New SV schemes 100%byusers GPWSCs will set a tariff adequateenough to cover the full
O&M cost from the users
2. New MV Schemes 100% byusers DWSS will make bulk supplies on volumetric basis and
levy water charges to GPWSCs based on tariff for such
bulksuppliesto be fixedbyDWSS from time to time.
3. Transferred SV Schemes 100% by users O&M cost may exclude the cost o f staff deployedby
DWSS which will be progressivelyphased out over a
period o f time
4. Existing MV Schemes 100%by users Same as for new MV schemesbut implemented
progressively linkedto new investments for scheme up-
Igradations and transfer o f intra-village distribution
responsibility to GPs/ GPWSCs
B. COMMUNITYSANITATION I 100%bvusers I GPWSC shall recover from the users.
(Open drains, small bore sewers, O&M will be through a service contract.
ponds rehab.)
I1 Investments % of
A. WATER SUPPLY Construction
costs
1. All water supply Schemes for all 10%byusers (a) Capital cost shall include common infrastructure from
Technology Options including SV and subjectto a source to distribution pipes, but exclude the cost o f house
MV schemes and other technologies maximum o f connections and consumer meters
like Reverse Osmosis etc. Rs.1,500 per (b)NotifiedSC habitations, InternationalBorderVillages,
household and Hilly Villages - 5% (SC habitation i s defined as per
GoP definition o f SC habitations)
(c) Community contribution will not be met from other
funds suchas GP funds, MPLADs, NRIs, etc.
(d) Household service connectionwill entail a minimumo f
Rs.500 /(250 for SC) as connection fee.
(e) Actual cost o f taking connection and meter will be borne
bythe respective household.
(0GPs willmake available landfor the facilities. Public
lands will not be counted against `contribution'.
g) Inthe case o fMV schemes, the village offering land
shall be compensated duly by other benefitingvillages. The
GP offering lands shallpay 30% less and the same shall be
borne duly by the other GPs.
53
Annex:6
Attachment 6 D
~~
B. COMMUNITYSANITATION Yo of Remarks
Construction
costs
2. Community Sanitation Drainage
- 10%byusers Sanitation contribution will be separatefrom that for water
Ponds rehabilitation, small bore subject to a supply.
sewerhewerage schemes. maximum o f Program will finance only the common facility, and all
Rs.1,500 per householdspecific investments will beborne bythe
household respective household.
Inthe case ofsmallbore sewers, schemewill notbetaken
upunless at least 70% ofthe households are ready with
Inspection Chamber and ready for connection to the
common facility.
SC habitations, International Border Villages, and Hilly
Villages - 5%
Other finds such as GP's external funds, MPLADs, NRI
donation etc. can be usedto meet the `contribution' upto
30% of the total. GP's own revenue can contribute an
additional 20%. Remaining 50% will be from the users.
Installment Share (YO)* Time of payment
1. 50% ofthe amount At the time o f giving written consent by GPWSC to join the
project. (after initial round o f project dissemination)
2. 50% of the amount Before invitation of the bids for construction o f water supply and
sanitation schemes.
54
Annex 7: FinancialManagementandDisbursementArrangements
INDIA: PunjabRuralWater Supply andSanitationProject
1. The project has satisfactory financial management arrangements to adequately account
for and report on the project expenditures incurred.
2. GoP proposes to implement the proposed project adopting a sector wide approach
(SWAP) statewide, by which all future public funding for the sector supports a single sector
policy and expenditure program under government leadership and adopts common approaches
across the sector, irrespective o f sources o f financing. From a financial management perspective
while there are elements o f a SWAP with GoP acceptance o fharmonization o fFMarrangements
internal to project i.e. budgeting, funds flow, accounting & accounting policies, internal control,
internal audit, concurrent audit & external audit and capacity building support in the area o f
Financial Management to GPWSCs irrespective o f source of funding. There will, however, be no
pooling o f funds between Go1 and the Bank (with differences in timing, frequency and
conditions for fund release) and there will be some differences inreporting requirements (to the
extent not covered inthe consolidated quarterly progress reports.)
FinancialManagementAssessment: (PRIsandCountryIssues)
3. A study on `Review o f Accounting and Accountability Arrangements for Panchayati Raj
Institutions and financial management capacity o f DWSS was undertaken. The review covered
aspects relating to institutional arrangements, funds flow, accounting, internal controls, audits,
transparency arrangements, staffing etc at the PRIs. At the DWSS level, the review inaddition to
covering the aspects mentioned above included an analysis o f budget/ expenditure data for the
past 5 years.
Panchavat Level issues
4. Weak Capacity at Panchayat Level: The study identified (i) capacity problems affecting
the maintenance o f accounts at the GP level (with one Panchayat Secretary responsible for 5 to 8
GPs) and preparation o f budgets; (ii) accounting was generally carried out, principles
while
varied; (iii)high level of cash withdrawals with inadequate control and accounting of such
withdrawals; (iv) Audits o f GPs were generally in arrears, generally upto 3 years, while ina few
cases even longer with a very large number o f audit observations pending clearance for long
periods. In addition, in most GPs, Standing Committees, which provide a wider forum o f
consultation and deliberation, have not been formed. These are sought to be addressed (i) by the
a development o f Handbook for GPWSC's on Procurement & Financial Management (ii)
financing o f one accountant at each GPWSC by the project; (iii)audit o f GPWSC by
independent C A firms (in accordance with specific terms o f reference) before every tranche
release.
DWSS
5. Accounting & financial systems at DWSS, compared to GPs, are much better organized.
However the following country issues emerged:
e Lack offinancial statements and audit opinion on the same. Inthis project specific efforts
have been made to align the Banks financial reporting requirements with the mainstream
55
accounting system. This will facilitate generation o f financial statement (statement o f
sources and uses o f funds) on which the State AG would be able to provide an audit
opinion.
e GoP's existing accounting system concentrates mainly on bookkeeping and transactional
control over expenditures and FM information is not generally usedfor decision making.
However, the project FM system, which builds on to the existing system, has been
designed to support MIS information required by the M&E team for monitoring
purposes.
e Delay in release of funds (Letter of Credit - LOC) from the Finance Dept: delay in
release o f b d s (LOC) by the finance dept and possible utilization o f LOC for one
project being used for another. This is sought to be addressed by a specific covenant in
the legal agreement that LOC will be issued for a quarter's fund requirement by the
Finance Dept within two weeks o f the request by DWSS. In addition informal controls
exercised by the Treasury will be addressedby an administrative order.
PublicFinancialManagement& Accountability (PFMA) Issues
6. A recent World Bank study undertaken on the Punjab Financial Management (PFMA)
systems has identified a number of weaknesses with the state's financial management systems.
Some o f the weaknesses related to the tight fiscal position faced by the State have eased in the
last one year. The impact o f the issues identified in the report on the project financial
management systems was assessed and discussed with the state government. Considering that
issues covered in PFM have a larger scope, these are sought to be addressed at three different
levels.
- A summary o f this analysis, whereby the risks having an impact on the project were
identified and specific mitigating measures built into the design o f the project, is annexed
to this assessment. (refer Attachment 7 A).
- To enhance transparency in implementation of this project, a cross-cutting Disclosure
Framework has been agreed which includes financial management aspects also.
- Issues which were more o f governance and systemic were taken up with GoP at state
level. GoP i s in the process o f implementing longer term measures to improve financial
management across the whole o f Government and has developed and shared an action
plan to implement the recommendations contained in the report, both in short term as
well as in medium term. The Bank team will provide support as requested and monitor
the implementation o fthese reform initiatives.
7. Significant Risks and Mitigation Measures
Risk Risk Risk Mitigation Measures incorporated into Project Design
Rating
Funds flow: Risk o f funds intended for M Wlule this remains as an lnherent risk, given the current
the project being diverted for other fiscal situation o f the GoP, the probability o f the same is not
pressing needs e.g payment o f salaries lugh. Inorder to ensure that the funds are made available to
and/ or delay in issue o f LOC to the the project in a timely manner a legal covenant has been
project and allocation o f the same to included in the financing agreement which requires the GoP
various implementing units (40 Divisions to make the funds available withm two weeks o f the request
and over 3000 GPs). of funds by the DWSS.Funds to the GPWSSC will be
directly transferred from the DPMCs intranches.
Risk of delav in financial reDorting due to M Following CDD principles the tranche releases to GPWSSCs
large number o f implementing units i l(based on MOUs and achievement of milestones) will be
56
consequently affecting disbursements eligible for reimbursement.
Reliance being placed on govt. financial systems with respect
to the Divisions o f DWSS responsible for implementation o f
MV schemes. These have been assessed to be regular and
timely inrendering o f monthly accounts to the AG.
Posting o f a senior finance staff from the treasury and
accounting service at the SPMC supported by a qualified
chartered accountant.
WeakFM capacitiesat GPWSCs S (i)The development of Handbook for GPWSSC's on
GPWSCs are new structures responsible Procurement & Financial Management; (ii) financing o f one
for most implementation activities at the accountant by the project at each GPWSSC; (iii) audit o f
GP level. Current FM practices at GPs o f GPWSSC by independent CA firms (in accordance with
accounting, reporting, etc. have been specific terms o f reference) before every tranche release.
found to be quite weak.
Overall Risk Rating S
I -High, S-Substantial,M- Modest, N- egligible
Strengths
8. Since the project proposes to use Govt. accounting systems for its accounting &
reporting, this certainly will be one o f the strengths o f the program. This will be particularly
useful, as the project can also extract information from the Govt. system on other schemes inthe
sector. FM arrangements in the DPMCs will be based on established FM arrangements o f
Divisions and the DWSS's current divisional accountants, persons who are well-versed with
such established processes, will be overall responsible for financial management duties at the
DPMCs.
9. Weaknessesand Action Plan
Weakness Resolution
Treasuw Overations: The project relies to a GoP has assured that Treasury operations have improved
large extent on LOC system o f treasury significantly in recent times with increase in computerization and
operations. Considering past experience o f currently all payments are honored within 4 days. Administrative
delays caused in fund-flow due to orders will be issued to address informal controls at Treasury and
inefficiencies and informal controls in the delays in authorization o f LOC. The TOR o f internal audit
treasury management. requires this aspect to be reviewed..
No internalaudit system is inplace. The project design provides for regular internal audits for SPMC/
DPMCs by independent chartered accountant fm under a
specific TORapprovedby the Bank.
Budgeting
10. The project would be budgeted component wise in GoPs budget with separate budget
lines for Go1funded schemes and Bank funded schemes. Inaddition, the funds to be transferred
to the GPWSC's for the SV schemes will be budgeted as Grant inAid. The project (SPMC) will
be responsible for preparing and consolidating an Annual Work Plan by December 31 each year
for the following financial year, in order to feed into GoPs budget cycle. Similarly on the receipt
side the GoP will reflect the funds to be received from the Bank and GoI. Community
contribution will only be reflected in the Annual Work Plan and not in the GoP State budget.
Based on the discussions with the Finance dept it was confirmed that the Line Dept (DWSS) will
57
have the flexibility to re-allocate budgets betweenthe components, ifrequired and does not need
to wait for legislative approval.
FundsFlow -GoPto Project
11. Pooling o f funds between Go1 and the Bank i s not envisaged, with parallel funds flow
arrangements from Goy Bank to GoP. Finance Dept. will issue LOC to SPMC based on its
quarterly requirement of funds, which will inturn reallocate these funds (LOC), as per detailed
budget to various DPMCs. DPMCs will be responsible for further release o f funds to GPWSCs
(for SV and intra-village component of MVs) and allocation of LOC to DWSS Divisions (MV
Schemes, Community Sanitation Schemes). This is depicted in the following flow chart: Funds
for the Program Management and Community Development Support will be retained at the
SPMC andDPMCs.
II WoridBank k.
'D v l A Dept. of Drinking Water, Goi ARWSP,I
Swajaldhara
State Project
Management Cell (SPMC)
of DWSS --,1
I :::EL: I
Dlstrict Project
~ l . " p ~ ~ ~ ~ ~ ~ ~ ~ M Celln(DPMC) e m e Divisions of DWSS
. a g n t
B in tranches) of DWSS
'rl, & (I)SVS (ii)'In Village' (1) Proj. Mgt. (ii) Community*I)
12. Inorder to addressthe delays: (i) the issue ofLOC byFDand (ii) inissue of
in delay
advice by the DTO to the Banks, the following procedure has been agreed with the GoP: (a)
based on the approved budget and annual work plan (broken down quarterly), LOC for the first
quarter's fund requirement will be issued by the FD. This will be on a lump sum basis and not
broken down by components thereby giving the flexibility to the Line Dept to allocate the LOC
as required. Such a request will be processed by FD within two weeks o f the request by DWSS;
(b) LOC for subsequent quarters wouldbebased on the projectedrequirement adjusted for actual
expenditure in the previous quarter. (c) Informal controls exercised by Treasury (such as
requesting for approved pending bills) will not be exercised. (d) The Dept (SPMC/ DPMC and
Divisions) will not open any Bank accounts to park funds especially at year end. (e) The timely
issue o f LOC by FDis a legal covenant.
58
Accounting & Internal Control
SPMC,DPMC and Divisions of DWSS:
13. A Financial Management Manual (FMM) which builds on GoPs existing accounting
systems and rules has been prepared for the project. The FMM captures aspects relating to
budgeting, funds flow, accounting, internal control, financial & administrative delegation,
internal and external reporting, staffing and audit arrangements. This will be applicable to all
future funding in the sector irrespective o f the source o f financing. Books of accounts by the
SPMC, DPMC and Divisions of DWSS will be maintained under the standard Government
Accounting Systems and monthly accounts will be rendered to the AG and reconciled on a
quarterly basis. Our assessment indicates that this system is functioning well and reconciliations
are complete till June 2006. Howeverinformationby project sub- components (for disaggregated
financial reporting), movement in security deposit deducted fkondpaid to contractors and
community contribution will be tracked by the project outside AG accounting system. The key
issues that havebeen addressed inthe design o f the accounting systems are:
e Tranche releases to GPWSSCs (net o f community contribution) will be made directly by
DPMC basedon M O U and fulfillment o f conditions o f tranche release, recorded as Grant
in Aid inthe books and will be eligible for reimbursement consistent with guidance on
CDD type projects.
e Community Contribution towards capital cost of schemes will be accounted for by the
DPMCs on a memorandumbasis and reported to the SPMC as the same is not capable of
being accounted inthe AG's accounting system.
0 Funds (LOC) will be allocated by the SPMC to various implementing units i.e. DPMC
and divisions o f DWSS (for MVS) and no Bank accounts will be opened except at
GPWSSC level.
e SWSM will ensure that regular reconciliation takes place between AG and all
expenditure incumng entities on a quarterly basis to ensure correctness o f the accounts,
which in turn will form the basis for the interim financial reports and disbursement
claims.
e While the AG accounting system will record project expenditures by components and
source o f financing, the implementing units will manuallyprepare monthly summary by
project sub- components and submit the same to the SPMC for consolidation and
financial reporting.
GPWSC
14. A Handbook for GP covering community procurement, financial management (covering
aspects relating to capital costs and 0 & M accounting) and disclosure and transparency
requirements has beendeveloped. The key arrangements are as under:
e Bank Accounts - GPWSCs will maintain a separate Bank account for Capital and 0 & M
funds. This will be operated under joint signatures o f the GPWSC Chairman and
Secretary. Funds will be released to GPWSCs by the DPMC intranches on fulfillment o f
the conditions inthe MOU.
e Accounting - A simple, manual system o f book-keeping (cash book) and reporting has
been developed for the GPWSCs. This is responsive to their capacity and has been
documented as GPWSC Handbook. Appropriate accounting procedures for community
contribution have also been documented inthe Handbook.
59
0 Staffing - An accountant will be recruited by the GPWSC (to be financed by the project)
to take care o fthe accounting requirements at the GPWSC.
0 Capacity Building - Adequate capacity building initiatives for Accounts Assistants, GP
Secretaries and GPWSC members have been agreed as part o f project design. This will
include training on book-keeping, procurement procedures, reporting, banking,
reconciliations, records retention, audit certification and social audit.
0 Social Audit/ Transparency - Strong elements o f Social Audit and Transparency will be
built into the project design. Books of account as well as expenditure statements shall be
available to all members for viewing. Information on scheme approval, funds received,
payments made and balances, will be prominently displayed inthe village at all time and
updated regularly.
Finance Staffing:
15. At SPMC a senior finance officer, at least o f the rank of a Joint Controller, would be
deputed from the Finance Dept. Inaddition a Financial Management Specialist, an experienced
chartered accountant as per terms of reference and job descriptions acceptable to IDA, will be
hired from the market on contractual basis. This team will be supportedby one section officed
superintendent level person. At each DPMC, a Divisional Accountant will be deputed to the
Divisions. He will be supportedby a Assistant Finance Manager as per terms of reference and
job descriptions acceptable to IDA, hired from the market on contractual basis. They will be
supported by two Finance Assistants, commerce graduate with experience o f computer
applications.
16. Internal & Concurrent Audit: The project will have an internal audit by an independent
firm o f Chartered Accountants who will review to ensure that the systems, procedures and rules
as documentedinthe FMManual are beingadhered to at the project level i.e. SPMC, DPMC and
divisions o f DWSS. The TOR for internal audit has been reviewed by the Bank. The TOR
provides for each DPMC (and a sample o f divisions within the DPMC) to be covered at least
once a year andthe SPMC twice a year.
17. Since a significant portion o f the funds is expected to be spent at level o f the GPWSC, a
concurrent audit by independent firms o f Chartered Accountants as per TOR agreed to the Bank
will be carried out before each tranche release, except the first. The TOR covers aspects o f
community procurement, financial management and community level transparency. Second (and
subsequent) tranche o f funds will be released to the GPWSC by the DPMC only on receipt o f
`InterimExpenditure Statements' duly certifiedbythe GPWSC Auditors.
18. Financial Reporting: The financial reports for the project (covering all sources o f
funding) havebeendeveloped and agreed with DWSS. This has beenmergedwith the Quarterly
Progress Report (QPR). The financial reports will provide information by project sub
components, with the overall expenditure reconciled with the expenditure report from the AG
based on project components. In addition, separate reporting to GoI, to the extent the QPR and
Financial reports do not capture the reporting requirements of GoI, will continue to be provided
by the GoP to GoI.
60
ExternalAudit
19. The Comptroller and Auditor General of India (C&AG) through its offices inPunjabwill
be the statutory auditor for the project. The C&AG's office will conduct an annual audit o f the
project financial statements (sources and uses o f funds covering all sources o f funds). The audit
report will be sent to the Bank within six months o f the close o f each financial year. The Terms
of Reference for the audit (along with the draft format o f the financial statements and audit
opinion) have been prepared and sent to the C&AG for their concurrence. Audit by the C&AG
may include a sample review o fthe GPs implementing the project also. The following auditreports
will bemonitoredinthe Audit ReportsComplianceSystem(ARCS):
ImplementingAgency Audit Auditors
Government o f Punjab (DWSS) Project Audit Comptroller and Auditor General
o f India, Punjab
Department o f Economic AffairdGoI Special Account Comptroller and Auditor General
o f India, New Delhi
Financing& DisbursementArrangements
20. The Bankwill finance approx 75 % of GoP's contribution to meet the project expenditure
(detailed in Annex 5) subject to a limit of U S D 154 million equivalent. Funds from the World
Bank will be made available to GoP (through the GoI) under the Standard Arrangements
between Go1 and the States. The Bank will provide an initial advance which will be transferred
by Go1 to the GoP estimated at US$5 million. The advance will be enhanced subsequently
proportionate to the increased level o f expenditure. Subsequent releases will be on re-
imbursement method based on actual eligible project expenditure reported by the project. This
would be based on the interimexpenditure reports (Component wise) from the AG's accounting
system adjusted for movement in security deposit recovered paid to the contractors which is
accounted division wise and not project wise by the AG. This will enforce discipline and ensure
that the divisions are regular and timely in submission / reconciliation o f monthly/ quarterly
accounts to the AG. The funds (tranche release) transferred to the GPWSC will be eligible for
reimbursement from the Bank.
SupervisionPlan
21. From a financial management perspective, the project will need intensive review looking
at internal controls, fund flows, auditing arrangements, and training. This will be through a
combination of periodic desk reviews and field visits. Special focus will be given to capacity
buildingandtraining at the GPWSC level.
61
Annex - 7
Attachment 7 A
Summary of major PFMobservations and Project Specific mitigation measures
S.No. Issues raised inPFMS Relevanceto Current status Project Specific Actions proposed
report the project
1. Large Committed
Expenditure Large revenue GoP's state revenues have Inview o fthe improvement inthe
Large portion o f committed expenditure can increased from Rs 5910 state's funding positionthis inherent
and non-development putconstraints crores in2001-02 to Rs risk has reduced. Tlus will be
expenditure covering the on availability o f 10032 crores in2005-06. monitored during project supervision.
entire amount o f revenue plan Fiscal deficit has declined
receipts. Thus putting development below 3% o f GSDP
pressure on funds available funds, thus compared to 7% Deficit o n
for developmental creating current account has also
expenditure. Revenue uncertainty over reduced from 24% to 7.3%
expenditures for 2003-04 availability o f o f revenue receipts. GoP
were 118% o f the state counterpart has achieved primary
revenue receipts. contibution o f surplus o f 1% o f GSDP in
the state. 2005-06
Sources: Outcome Indicators
of States 'Own Fiscal
Correction Path; Assessment
by WBEconomic Consultant.
2. Diversion o f earmarked
funds There are GoP has stated that the GoP has committedthat the funds
possibilities that situation was resorted would be transferred to the project
More than Rs 4500 crores project funds duringthe period when the within 2 weeks. This will be
(approx. $900 million) provided by state was facing extreme monitoredby (i) covenant o n timely
received from FCIfor Bank could be shortage o f funds, which issue o f LOC (ii) including review by
repayment o f commercial diverted for even could have resulted in project internal audit
bank credit diverted other purposes. default insalaries. Since
between 1996-03. Apr'O5 the said amount has
been converted into loan,
and the Govt. is making
regular repayments.
3. Treasurv Management
- Irregular cash Since the project This was primarily due to Considering the improvement incash
management practices, would rely on the cash crunch faced by situation as well as the modernization
including prioritizing LOC system for the state during the period o f treasuries, the probability o f the
payments, all its payments 1995-96 till 2002-03. Since risko ftreasury operations being
- Verbal instructions to (i.e. once LOC i s then the cash situation has misused has somewhat reduced.
treasuries to release issued it can improved. At present state Following mitigating steps will help
individual payments issue cheques for has around Rs 1800 crores ensure that these risks are firther
all payments) surplus with RBI.During minimized.
- Telephonic instructions hence the risk o f the current financial year it
to stop sanctioned irregular treasury has paid 93% o f all Timely issue o f release o f LOC as
payments due to cash transaction i s sanctionedpayments. legal covenant
constraints limited to this Fixingo fstandards for fundtransfers
- Large arrears o f extent. between SPMC and other agencies
payments with treasuries Modernization o f Treasury and payment periods for bills
- operations presented.
Cashcrunch resulting in
delay I reduce release o f All 19 district treasuries Monitoring arrangements through
funds to development and 5 1out o f 67 sub- internal audits with specified TORfor
treasuries have been
62
-
S.No. Issuesraised inPFMS Relevanceto Currentstatus ProjectSpecific Actions proposed
report the project
schemes. computerized. Remaining non-adherence to these standards.
will be completed within
next year. Data from all
districts and sub-districts
being stored at the
Directorate.
-
BUD( 5T MANAGEMENT
-
4. Poor Budget Execution
. Lack o f ownership o fthe Lack o f Budget execution is a The Annual Work Plan(AWP) will
budget bythe line dept. involvement o f much larger issue, bepreparedbyDecember each year
h e line dept. in involving budget for the following financial year. This
9 Large amount o f will form the input from the project
expenditure i s bunched preparing and ownership by the executing
for GoP annual budget exercise.
towards the end o fthe year receiving final dept.1agency, developing
to avoid lapsing o f grants. plan with budget better mechanisms for
T h i s would result infunds results ina monitoring, etc. This will
be addressedas part ofthe
beingparked inthe form of situation where
PLAs, advances. It also the emphasis by actionplan prepared by the
GoP for taken actions on
results inpoor depts. is more on
the PFMA report.
implementation, as spending budget utilization
rather than proper
is done ina rushwithout execution.
- adequateplanning.
-ACC( LJNTING & FINANCIALR 'ORTING
5. Reconciliation issues due to
different set o faccounts
Accounting at Govt. level is
based on the concept that Since it i s a LOC AG (A&E) confmedthat Since mainstream accounting system
while line depts. prepare the basedproject all the Divisional offices o f is timely and the program aims to
bills, treasury makes the with the books o f the DWSS are timely in work across the sector, the project
payment and AG undertakes accounts being submission o f monthly would rely on mainstreamaccounting
accounting for the same. maintainedby accounts and these have procedures as this would also
However this three layer AG (A&E), this also beenreconciled upto facilitate receiving informationon
process gives rise to its own problemis June 2006. The AG also RWSS programs fhded through
problems mainly that o f mitigatedto some confirmed that they would other sources. Adequate finance man-
reconciliation betweenthe extent. be ina positionto provide power at various levels o f the project
records kept by these monthly accounts (by [including a senior officer (at least
different levels and components) to the project Finance Controller level) to be
providing up to date bythe 25" ofthe following deputedbythe FinanceDept. anda
information to the decision- month(on a consolidated full-time experienced chartered
makers at various levels basis) accountant.
within the Govt. Mechanisms to monitor timely
reconciliation o f accounts with AG,
is part of TORo fthe internal audit.
~INTE NAL,CONTROLS(includin
6. Internal controls
Although elaborate Since the project The Divisional Offices are A formal Financial Management
framework o f internal will be mannedby divisional Manualhas been developed to ensure
controls exists through implemented accountants posted by the clarity and uniformity on internal
various codes, rules, through different AG (A&E) who are trained control procedures among different
regulations is inplace. In agencies, inworks related implementing agencies. An
practice compliance is low. includingGPs, accounting/ reporting and integratedmanual has also been
DPMCs and internal controls. developed for GPWSCs, covering
SPMC, ensuring both financial management and
Annex - 7
Attachment 7 A
S.No. Issues raised in PFMS Relevance to Current status Project Specific Actions proposed
report the project
compliance to procurement aspects.
different codes
andprocedures
would be
necessary.
Inadequate internal audit
N o regular process o f Presently no The SPMCs / DPMCsDOs would be
internal audit for line internal audit covered by regular internal audits
departments which are process exists at (withspecifiedToRs) by chartered
primarily responsible for the project. accountant fm.GPs would also be
budget execution. subject to concurrent audits based on
specific ToRs. Management action o f
issues identified during these audits
will be reviewed during supervision
ACC( JNTABILITY
7. External audits Considering that there is no
Large number o f audit paras record for monitoring and Under the project, it would be the
remains. follow up o f outstanding
paras at the Head Office is responsibility o f SPMC to ensure
indicative o f low priority early resolution o f all audit
given to clearance o f audit observations. These will be regularly
paras which remain the monitored during Supervision
responsibility of individual
divisions.
Last report o f AG available
i s for FY 2004-05.
Large Dendency o f audits Project fmancial statements will be
Number o f organizations not audited by CAGthrough its office o f
getting audited due to Punjab (AG). A project specific TOR
inadequate staff strength. will be agreed withAG to ensure that
audit is taken o n a timely basis to
- comply with the Bank's covenants.
WEA
8. Poor fmancial management
at GPs The main strategy Since PRIs were to be the Due to insufficient capacities at the
There are weak accounting of the program is main instrument of PRIs, project has taken a mix o f Dept.
capacities at the large to rely onPRIs to implementation, a AAA approach with GPWSC (a sub-
number o f PRIs, who are ill- be the main study was specifically committee o f the GPs), specifically
equipped to maintain instrument o f the undertakento assess their constituted for implementation o f
complex scheme-wise implementation. capacities. The results o f Water & sanitation program.
accounting. the study are inline with Additional measures include:
conclusions arrived inthe
PFMstudy. - A separatebank account for
LocalFundauditor is GPWSC to ensure timely funds.
responsible for audits, but - Asst. accountants will be engaged
there are huge backlog o f byGPWSC to provide accounting
audits. support.
64
Annex - 7
Attachment 7 A
S.No. Issues raised in P F M S Relevance to Current status Project Specific Actions proposed
report the project
- firms ofchartered accountants
will be appointed to undertake audit
of expenditure incurredby GPWSCs.
- A Planhas beenprepared for
training GP fimctionaries and asst.
accountants.
- A transparency and disclosure
framework has also been agreed with
the project.
65
Annex 8: ProcurementArrangements
INDIA: PunjabRuralWater Supply andSanitationProject
1. The procurement to bemadeunderthe program will involvebroadly the following:
(a) New piped water Schemes; (b) Rehabilitation and up-gradation o f existing piped water
schemes; (c) Community Sanitation schemes like renovation of village ponds and development
of Underground small borehewerage system; (d) Goods like office equipment, computers, bulk
water meters; (e) NGO/Consultancy services for project management, MIS, quality assurance,
capacity building, engineering design and supervision, accounts and book keeping etc; and (f)
Training.
ImplementationArrangements
2. Theprocurement underthe programwill behandledas under:
a) DWSS Divisions will be responsible for procurement of common infiastructure o f
MVwater supply schemes and Community Sanitationschemesunder the Project.
b) GP /GPWSC will be responsible for procurement o f SV water supply schemes and,
intra-village works for MV Schemeswith technical support fiom DWSS; and
c) SPMC/ DPMCs will be responsible for procurement o f all goods mentioned in the
paragraph entitled "Goods" under the "Procurement Arrangements" and consultancies
underthe project.
3. For procurement under the program, DWSS has developed a Procurement Manual. This
Manual i s acceptable to the Bank and all procurement under the project will be handled as per
the provisions o f this Manual. The Manual requires that procurement o f all goods, works and
services will be in accordance with the Bank Guidelines o f May, 2004. Similarly, all
Consultancy Services shall follow the Bank Consultant Guidelines of May 2004. The Manual
also stipulates that for all procurement following NCB, the Bank's Standard BiddingDocument
as agreed with Go1 task force and as amended from time to time will be used as a base. For
procurement following ICB and procurement o f consultancy services, the Bank's SBD and
Standard FWP will be used as a base and will be as agreed with New DelhiOffice o fthe Bank.
ProcurementArrangements
4. Goods: Goods to be procured under the program will generally be office equipment,
computers, bulk water meters, goods and equipment for water quality testing laboratories, field
kits, vehicles, IEC materials. Most o f the procurement o f goods will be small value and will
follow NCB/Shopping procedures. However, Bulk Water Meters will be procured following
ICB procedures intwo packages.
5. Works:The works under the programwill be procured as under-: Water Supply Schemes
a) MV schemes: The procurement o f these works will be handled by DWSS except that
intra-village works o f M V s will be procured by GPWSCs. Initially out o f 5 water supply
schemes under the pilot batch, there will be 3 MV Schemes, the procurement for which
will be carried out by DWSS andthe remaining2 schemes, which are SV schemes, will
be procuredby GPWSCs. The DWSS will procure the complete scheme including works
66
related to tube well (or canal as applicable), pumps, rising mains and OHSR in a single
contract package. The procurement will be done on a single responsibility basis wherein
all materials and labor component will be arranged by the contractor. DWSS will not do
any procurement of materials like cement, steel and pipes etc. for supplying to the
contractor. The contractor will arrange all the materials on his own as per the
specifications stipulated in the bid document. The distribution works for the MV
Schemes will be procured by GPWSCs as a separate package.
b) SV Schemes: The procurement o f SV Schemes will be handled by GPWSC. GPWSC
may engage a single contractor for carrying out all components o f the scheme (except
supply andlaying ofpipes for water supply distribution works which will beprocuredas
a separate contract package). GPWSC will also have the option to procure the SV
schemes inthree slices [i]Boring and installation o f tube well (or the canal related works
o f filtration plant, clear water reservoir etc.) [ii]Construction o f OHSR and civil works
and [iii] Providing and laying o f water supply distribution system. In addition GPWSC
will also have an option to implement water supply distribution works byprocuring pipes
separately and installing them either by awarding labor contract or through the
community.
6. The procurement for the other remaining schemes under the project will continue as per
the above mentioned arrangements. However the lessons learnt from the pilots will be
incorporatedinthe procurement o f the remaining schemes byDWSS and GPWSCs.
Water Supply Rehabilitation and Community Sanitation Schemes:
7. The works for rehabilitation o f water supply schemes and o f the community sanitation
schemes will be procured by DWSS Divisions (or GPWSC) following NCBBhopping
Procedures.
8. Consultancies: These will include consulting services (national and international) for
hiring o f Support Agencies, specialist firms and individual consultants (management, HRD,
social development, engineering, monitoring, finance, etc); training institutions; and for sector
policy and other studies. The major consultancies will be:
(a) NGOs/ Support Agencies for providing community development support to GPs through
about 80 contracts, each o f value o f about US$80,000 and covering about 30 GPs each (total
value US$6.4million); Another about 200 contracts o f values ranging from US$lOOOO- US$
20,000 for providing only leadership and guidance to Village Support Teams for community
mobilization inabout another 30 GPs each (total value o f about US$4.0 M).
(b) Engineering design support consultancy: about 250 contracts o f values ranging between
US$20,000 to US$40,000 each, (total value about US$7.5 M); One contract to Punjab Remote
Sensing agency (value about US$lOO,OOO) for developing water quality and resource maps;
about 30 contracts for independent construction and water quality monitoring o f values less than
US$lO,OOO each.
(c) Management Support Consultancy: about 5 contracts o f value ranging between
US$lOO,OOO to US$200,000, each
67
(d) Chartered Accountancy firms to provide book-keepingand accounting support to project
GPs (About 12 contracts each o f value less than US$lO,OOO each)- total value US$O.OS million.
The other services will include consultant studies for developing sector information management
system, benchmarking and sector progress reports, monitoring and evaluation studies, research,
water quality testing services, and financial and technical audits. The project will hnd services
requiredfor training, workshops and seminars. The training and workshops will be arranged at
the State, District and Block level, and the expenditure would not exceed US$3,000 per training
module. The total trainingcost would be US$4 million.
9. Short lists o f consultants for services estimated to cost less than US$500,000 equivalent
per contract may comprise entirely o f national consultants in accordance with the provisions o f
paragraph 2.7 of the Consultant Guidelines.
10. Operating Costs: This will cover the cost of operating project management units, one at
the state level and one each in 19 Punjab Districts. The costs will include staff salaries (of only
contract staff) and all staff travel, conveyance and subsistence costs and operating costs such as
office rental and other expenses, vehicle rentals, equipment maintenance contracts, etc. The
contract staff requirementis estimated to be about 5000 person months spread over 6 years. The
project will finance only the contract staff (About 90 staff position in SPMC and DPMCs
together will be filled inwith contract value o f each staffvarying from US$15,000 to US$75,000
over 5 year period, but engaged in2 years extendable contracts).
Assessment of the agency's capacityto implementprocurement
Procurement Legal Framework
The Constitution o f India (Seventh Schedule) lists specific subjects in which the Union
Government or the State Government alone can make laws and concurrent subjects in which
boththe Unionand State Government canmakelaws.
11. Procurement o f goods, works and services by the Go1 and the State Governments i s
regulated only by the contract governed by the Indian Contract Act and the Sale of Goods Act
and, inspecial cases, bythe Essential Commodities Act.
12. A CPAR was prepared inthe year 2001 which provides an understanding o fthe national
procurement system. Based on this assessment, the existing basic framework of rules and
procedures in India requires open tenders, open to all qualified firms without discrimination, use
of non-discriminatory tender documents, public bid opening and selection o f most advantageous
tender taking all factors (preferably pre-disclosed) into consideration. The weaknesses identified
in the CPAR are: absence of a dedicated policy-making department, absence of a legal
framework, absence o f credible complaint/challenge/grievance procedures, absence o f standard
tender documents, preferential treatment in procurement and negotiation, delay in tender
processing and award decision, andthe two-envelope system.
68
Assessment o f existingprocurementprocedures and capacity of DWSS and GPWSC
13. The review of existing procurementpolicies and procedures was carried out for the rural
water sector o f GoP to identify the area for strengthening and for allowing their use under the
program. The assessment carried out suggests that the procurement adopted by PWD including
DWSS originates from Punjab Financial Codes and Rules, PWD Code, Buildings and Roads
Manual. All the codes and manuals are mandatory and some o f them are outdated. Rules and
executive instructions o f the GoP now being followed have been drawn from these manuals and
are documented. Standard practice i s therefore to rely more on rules and executive instructions o f
the GoP rather than to Codes and Manuals which are not freely available and its interpretationi s
vague.
14. Some o f the variations with respect to the practices acceptable to the Bank are, price
variation permitted even for contracts o f 6 months execution, no provision o f insurance, defect
liability period o f only 3 months, DWSS reserving right to supply cement and steel and other
materials like pipes etc. in execution o fworks, no provision to assess bid capacity, arbitration by
department officials only, no RFPs for procurement of consultants.
15. Other items identified during the assessment are, excessive time taken for finalization of
contracts, low delegation o f powers, negotiation with the bidders, no single document which
includes all rules, procedures and standard form to be followed.
16. The above deficiencies and the applicable deficiencies identified in the CPAR have been
addressedby the following actions:
(a) A Procurement Manual has beenprepared which contains methods andprocedures to be
followed for procurement and are acceptable to the Bank. The provisions o f the Manual
applicable for GPWSCs will be translated in local language and will be issued to GPWSCs. (b)
GoP has opted to use the Standard Biddingdocuments o f the Bank as agreed with Go1task force
(and as amended from time to time) for all procurement under NCB. (c) For ICB procurement,
the Bank's SBD will be used as a base and will follow the Bank's Procurement Guideline, May
2004. (d) For all procurement o f Consultancy Services, the Bank's Standard RFP as agreed with
the NDO will be used as a basis and will follow the Bank's Consultant Guidelines May 2004. (e)
Inaddition, ithasbeenagreedthat for NCBprocurement, the followingwill apply:
i) Invitation to bid shall be advertised in at least one national daily newspaper, at
least 30 days prior to the dead line for submissiono fbids
ii) Nospecialpreferencewillbegiventoanybiddereitherforpriceorforanyother
terms and conditions when competing with state owned enterprises, small scale
enterprises etc.
iii) Exceptwithpriorconcurrence ofWorldBanktherewillbenonegotiations of
price with the bidders, even with the lowest evaluated bidder.
iv) Extension o f bid validity will not be allowed without prior concurrence o f World
Bank: (a) For the first request for extension ifit is longer than 4 weeks and; (b)
For all subsequent requests for extension irrespectiveo fthe period
v) Re-bidding will not be carried out without prior concurrence o f World Bank
vi) Rate contracts entered into by DGS&D will not be acceptable as a substitute for
N C B procedures. Such contracts will be acceptable for any procurement under
Shopping procedures.
vii) The two or three envelope systemwill not be used
69
17. DWSS has specifically agreed that for procurement under the program, the materials like
cement, steel and pipeswill be inthe scope o f work of the contractor and DWSS or GPWSC will
not procure these items separately to supplyto the contractors.
18. However, for procurement to be done by GPWSCs, at their option, GPWSCs can
separately procure pipes and get them installed through separate contracts. The works o f tube
well (or canal as applicable) and OHSRwill however be executed by GPWSCs through contracts
only and cement, steel etc. will be inthe scope o f the contractors and not separately procured by
GPWSCs for issuingto the contractor.
Methods of Procurement
19. Goods estimated to cost US$200,000 or more per contract and works estimated to cost
US$l,OOO,OOO or more per contract will be procured following ICB procedures as per Section I1
of the Procurement Guidelines. Goods estimated to cost US$30,000 or more but less than
US$200,000 per contract and works estimated to cost US$30,000 or more but less than
US$l,OOO,OOO per contract will be procured following N C B procedures stipulated in the
Procurement Manualwhich generally meet the requirement o fParagraph 3.3 o fthe Guidelines.
20. Goods and works estimated to cost less than US$30,000 per contract may be procured
following Shopping procedures stipulated in the Procurement Manual which meet the
requirement o fParagraph 3.5 o fthe Bank's Guidelines.
21. Goods and works estimated to cost less than US$l,OOO and up to an aggregate value o f
US$lOO,OOO and the goods and works which meet the requirement o f Paragraph 3.6 o f the Bank
Guidelines may be procured following Direct Contracting Procedures. Works that meet the
requirement o f paragraph 3.8 o f the Guidelines may be implemented, with prior clearance from
the Bank following ForceAccount methods.
22. Consultancy Services will be procured following Least Cost Selection, CQ, Single
Source, QBS and QCBS methods stipulated in the Procurement Manual and in accordance with
the Bank's Guidelines. The services o f individual consultants will also be procured as per the
provisions stipulated inthe Procurement manual andthe Bank's Guidelines.
Review by the Bank
23. First contracts for the five pilot villages to be implemented by DWSS, first three
contracts implemented by GPWSCs on single responsibility basis, first three contracts for the
three packages if awarded separately by the GPWSCs, contracts for works estimated to cost
US$500,000 or more, all ICB contracts of goods and all contracts o f US$lO,OOO and above
awarded on Direct Contracting basis, will be subject to prior review by the Bank. In addition,
first contract for procurement o f computers following N C B and first contract for other goods will
also be subject to prior review by the Bank.
24. Consultancy contracts to be awarded to firms and estimated to cost US$lOO,OOO or more,
contracts award to individuals and estimated to cost US$50,000 or more, will be subject to prior
review. Further sole source contracts to firms estimated to cost US$50,000 or more and to
individuals estimated to cost US$lO,OOO or more will be subject to prior review.
70
25. All other procurement willbe subject to post review. Further, inorder to ensure fiduciary
compliance, the following arrangements will be put inplace:
26. The persons dealing with Procurement in GPWSCs will be trained by DWSS, either
directly or by hiring support organizations like NGOdconsultants. Social oversight would be in
the nature o frequirement o f approval o f all schemes by the Gram Sabha, access to community o f
all documents relating to procurement, and suo-mot0 disclosure by the GPWSCs o f contract
award data and material procurement data, including cost o fprocurement, and labor employment
at the place o fwork.
Audit
27. Since a significant portion o f the funds is expected to be spent at level of the GPWSC,
firm o f CAS(2-3 for the entire state) will be hiredby SPMC/ DPMCs for "Concurrent Financial
Audit" o fthe GPWSC expenditure. TORSo fthese firms will also include review for compliance
withprocurement Procedures.
28. For post review o f the procurement to be done by DWSS and the GPSWCs, the project
will hire a consultant, whose terms o f reference will be agreed with the Bank. The report o f this
consultant will be made available to the Bank.The Bank will review the report o f the consultant.
Inaddition, the Bank may also carry out the post review of any contracts awarded by DWSS or
the GPWSCs on sample basis andthe sample will be decided by the Bank.
29. Further, in view o f the findings in the PFM report for Punjab, prepared by the World
Bank and forwarded to the GOP on May 19, 2006, a "Risk Mitigation Action Plan" and an
"Action Plan for Enhancing Transparency and Accountability" has been agreed with GoP and
included as Annex 8A andAnnex 11respectively.
30. The overall project risk for procurement is considered high in view o f the changes in
procurement procedures proposed for this project
ProcurementPlan
31. The Borrower, at appraisal, developed a Procurement Plan for project implementation
which provides the basis for the procurement methods. This plan has been finalized and agreed
between the Borrower and the Project Team on October 25, 2006, and is available at New Delhi
Office o f the Bank. It will also be available inthe Project's database and inthe Bank's external
website. The Procurement Planwill be updated in agreement with the Project Team annually or
as requiredto reflect the actual project implementation needs and improvements in institutional
capacity.
32. Freauencv o f Procurement Supervision: Inaddition to the prior review supervision to be
carried out from Bank offices, supervision missions annually to visit the field to carry out post
review ofprocurement actions are considered necessary.
71
1 2 3 4 5 6 7 8 9
Ref. Contract Estimat Procurement P-Q Domestic Review Expected Commen
No. (Description) ed Method Preference by Bank Bid- ts
cost (yeslno) (Prior / Post) Opening
Date
PRW Procurement USD ICB N A Yes Yes 12.11.06
SSPI ofBulk 215,000
G-3 Water Meters
PRW Procurement USD ICB N A Yes Yes 01.28.07
SSPI o f Computer 317,000
(3-21 (Server,
Laptop) for
DPMCs
PRW Procurement USD ICB N A Yes Yes 04.24.07
SSPI ofBulk 1.3
G-27 Water Meters million
(b) ICB Contracts estimated to cost above US$200,000 per contract and all contracts
estimated to cost US$lO,OOO and above awarded on direct contracting will be subject to
prior review bythe Bank.
34. ConsultingServices
1 1 1 1
1 2 3 4 5 6 7
Ref. No. Descriptionof Estimated Selection Review Expected Comments
Assignment Cost Method by Bank Proposals
(Prior I Post) SubmissionDate 1 I
-NIL- -NIL- I -NIL- I -NIL- I -NIL- -NIL- 1 -NIL-
(b) Consultancy services estimated to cost above US$lOO,OOO per contract and Single Source
selection o f consultants (firms) for assignments estimated to cost above US$50,000 will
be subject to prior review by the Bank.
(c) Short lists composed entirely of national consultants: Short lists o f consultants for
services estimated to cost less than US$500,000 equivalent per contract, may be
composed entirelyof national consultants in accordance with the provisions o f paragraph
2.7 o fthe Consultant Guidelines.
72
Annex - 8
Attachment 8 A
RapidProcurementReview Reportand RiskMitigationAction Plan
1. Based on Audit and Inspection Reports o f AG for the periods December 2002 to October
2003, November 2003 to December 2004 and January 2005 to October 2005 for RWS Mohali
Division and audit paras o f November 28, 2005 and November 30, 2005 for Chief Engineer's
office; Response o f DWSS to some pending Audit paragraphs; and the Bank's observations as a
result of review o f some procurement related files, the risks identified and an action plan to
mitigate these risks as agreed with GOPDWSS is as below:
Sr. Observation Risks SuggestedMitigation Agreed Action
-No. Head
1. Lack o f clarity on Inefficient use o f Organize mentorship and training GoP will arrange for
Public resources; High programs with emphasis on adequate training on
Procurement cost; Loss o f understanding and application o f regular basis through
Processes confidence inthe rules to real cases; andPeriodically dedicated structured
system; and update the general appreciation o f modules for the state
Incorrect the procurement staff inglobal best agencies.
application o f practices.
rules andpractices
resulting in
possibility o f
collusions.
2. Deficient Planning Inefficient Establish clear relationbetween Provide structured training
Monitoring, utilization or project objectives andprocurement; to the officials through
Evaluation and idling or waste o f Establish clear monitoring reputedInstitutions and
Reporting with resources; procedures andmandatory reporting improve the monitoring and
respect to Diversiono f requirements; and ensure timely reporting o fthe projects for
Projects. funds to compliance and follow up formats stricter andproper
expenditures not with clear responsibilities. coordination o fproject
clearly identified related procurement.
or neededfor the
project;
Loose controls
and slippages; and
Overall system
failure to achieve
targeted
- development.
3. Weak Poor quality o f Prepare implementationManuals Provide structured training
implementation work or product; with clear guidelines on each stage to strengthen the
Delays in o fproject implementation with departmental expertise on
completion o f emphasis on the Contractual implementation aspects and
work and cost provisions andRights and develop procedures and
overruns; Obligations o fthe parties; Establish formats for pre-audit bythe
Loss o f end-user training modules and ensure that all supervising officials to
confidence on the staff attends these sessions on a obviate slippages on
system; and regular mandatory basis; and contractual matters.
Accrual o fundue Engage the Technical (Executive)
exchequer loss. staff also to share experience on
implementation issues across the
state and corroborate the decisions
with established experts inthe field
to amend, infuture, mistakes ifany
made.
-
73
Annex - 8
Attachment 8 A
Sr. Observation Risks Suggested Mitigation Agreed Action
-
No. Head
4. Non- transparency Experience gained Review and standardize T o develop systems and
indecision are not Procurement process, including procurement procedures
making since the institutionalized Disclosure Policy for procurement consistent with
decision making is resulting in decisions; Establish and implement international best practices,
generally inconsistent the Procurement Reforms Action engaging renowned
individual centric decision making; Plan; and Include Civil Society experts. Ensure oversight of
Loss o f credibility oversight duringthe procurement independent observers
inthe process; and implementation phases to boost duringbidevaluation
and Possibility o f public confidence inthe system. process and civil society
inefficient duringimplementation
procurement phase o f the projects as
regime confidence building
measures, inaddition to an
elaborate disclosure policy
and compliance to RTIAct,
2005.
5. Weak Loss o f Ensure prompt response to, and The pending audit and
procurement confidence inthe effective follow-up o f audit vigilance cases to be
Audit and system. observations and effective pursued to conclusion and
Vigilance Follow- monitoring o f the pending Audit and hture cases to be closely
UP Vigilance cases. monitored and followed-up
witha time-frame for
response and compliance.
6. Inadequate Record Loss o f Maintain all records duly catalogued DWSS will maintain all
keeping confidence, non and indexed ina manner and the records duly catalogued
availability o f form which facilitates the Rightto and indexedina manner
documents when Informationunder the RTIAct, and the form which
required by 2005 and ensure that all records that facilitates the Right to
supervising are appropriate to be computerized Information under the RTI
agencies and audit are, withina reasonable time and Act, 2005 and ensure that
and vigilance, subject to availability o f resources, all records that are
delays in computerized and connected through appropriate to be
responses a network all over the state on computerized are, within a
different systems so that access to reasonable time and subject
such records is facilitated. to availability o f resources,
computerized and
connected through a
network all over the state
o n different systems so that
access to such records is
facilitated.
2. Other specificmitigationmeasureswhichhavebeenagreedare:
A Procurement manual has been prepared. The procedures stipulated in the Manual
addressthe requirementsoftransparencyas under:
a) FB to bepublishedin at least one Englishdaily; b) At least 30 days time to be allowed
from IFB to date of bidopening; c) Bids to be openedpublicly inthe presenceof bidders;
d) Bid documentspreparedby Go1and agreed with the Bank will be used; e) Disclosure
requirementas stipulatedinthe Bank Guidelineswill becompliedwith.
74
Annex - 8
Attachment 8 A
Actionsby State
3. As some o fthe systems and procedures need to be amended, the state needs to review the
procurement rules, procedures and practices for updating / modification inline with the latest
acceptable international practices. This will ensure that the procedures are followed uniformly
throughout the State.
75
Annex 9: Economicand FinancialAnalysis
INDIA: PunjabRuralWater Supply andSanitationProject
SummaryEconomicAnalysis
Cost benefitNPV=US$78 million; ERR= 23%
1. Background: The economic analysis has been carried out for entire SWAP Program. A
specially designed household survey covering about 2500 households for SVS and M V S was
carried out to get baseline information, and an additional sample survey o f 523 "control
households" was undertaken to document data on the post-project scenario. The information
from the "control households" has been used for assessing the likely benefits due to improved
water supply and sanitation services. The cost side information i s based on a representative
sample o f schemes selected across 84 villages (17 districts) on the basis of sources o f water
supply and the types o fproposed technology:
Cluster 1: SV Scheme tube well - N C category;
Cluster 2: SV Scheme tube well - PC category;
Cluster 3: SV Scheme canal;
Cluster 4: MV Scheme tube well - N C category;
Cluster 5: MV Scheme tube well -PC category;
Cluster 6: MV Scheme canal source.
2. The economic analysis has beencarried out separately for each o f the above six schemes
and for the program as a whole, usingthe likely technology mix and the proposedphasing of the
program.
3. Project Benefits: The entire SWAP isjustified on the basis o f direct benefits to more than
659,000 households in 3000 NC/ PC villages. The rate o f growth o f population i s considered to
be 1.2% per annum. Based on the survey data and secondary sources o f information, the likely
quantifiable benefits due to the proposed project interventions are:
0 Value o f time saved inwater collection;
0 Value o f incrementalwater supply;
0 Value o f saving in recurring and capital cost (cost incurred to maintain the existing
supply o fwater inthe `without' project situation);
0 Value o f health benefits due to reduction in incidence of diarrhea, gastroenteritis and
malaria;
0 Value o ftravel time saved due to shift from open defecationto householdtoilets;
0 Value of improved quality and yieldo f cattle milk;
0 Value o ftime saved inwater collection for cattle;
0 Value o f fish sold due to renovation o fpond and fish breeding.
4. The time spent on water collection has been obtained from the household survey data,
with appropriate weights for dry and wet seasons. The expected time savings is about 0.38 hrs /
household / day after the project implementation. An assumption o f 60% households preferring
domestic connections and 40% preferring stand posts is considered for the analysis. The time
saving has been valued at the opportunity cost o f labor, based on the number o f days o f gainful
employment.
76
5. Incremental (additional) water will be available for consumption to the project
beneficiaries due to improvements in the existing service level. The incremental water
consumption is estimated as the difference between the designed supply and present water
consumption, after the schemes are operational. Inthe absence of a detailed demand curve, the
`average demandprice' (approximatedby the average o f the current and future cost o f water) has
been used to value the incremental water. The value o f incrementalwater is separately calculated
for 65% households who are expected to completely shift from the existing source to a new
source (at average demand price) and remaining 35% households who are expected to continue
usingthe existing andthe new source (at future value o fincrementalwater consumption).
6. The capital cost saved i.e. cost saved due to periodic rehabilitation or replacement o f the
existing schemes, has been valued by taking the cost o f prevailing technology options (Hand
pump, Motorized Handpump and Submersible Pump) for the analysis. This cost will be avoided
due to the project schemes delivering improved services. The saving o f this capital cost works
out as Rs.7010 per household saved once in ten years. The corresponding saving in O M cost
works out as Rs.1123 per householdper year.
7. The benefits from reduced incidence of malaria, diarrhea and gastroenteritis diseases
have been considered and the following three types o fbenefits quantified:
0 Reduction in treatment related expenses: Based on household survey and field data, the
average expenditure incurred on medication per incidence of diarrhea (Rs.250),
gastroenteritis (Rs.300) and malaria (Rs.350) are taken for the economic analysis. The
reduction in expenditure on medication o f diarrhea (21%), gastroenteritis (39%) and
malaria (37.5%) are taken as benefit from the project.
0 Reduction in mortality and loss o f direct man days: The Disability Adjusted Life Years
(DALYs) information on morbidityandmortality for India is used for assessingbenefits
from reduced incidence o f above diseases, valued at the opportunity cost o f labor.
0 Reduction in loss o f indirect man days: Based on household survey and field data, the
number o f indirect person days lost has been determined for the attendant, usually the
female household member. It i s assumed that indirect man days lost are 3 days for
gastroenteritis, 2 days for diarrhea and 5 days for malaria, per incidence o f the disease.
The reduction inindirect persondays lost is valued at the opportunity cost o flabor.
8. Thetravel time saved due to shiftfrom open defecation to household toilets is considered
as a benefit, and it i s assumed that the post project travel time spent by households with toilets is
nil.This effective time saving hasbeenvalued at the opportunity cost oflabor. It is assumedthat
30% o f total rural households will construct toilets and the expected time saving is 0.70 hrs/
household day after the project.
9. The benefits from improved quality and yield of cattle milk have been considered as a
result o f improved water supply services to the rural households. Data from the Department o f
Animal Husbandry and field survey shows that on an average each household in a village o f
Punjab has 3 cattle, split in an overall ratio o f 25 % cows and 75% buffalos. Out o f the cattle
owned by villagers, about 24% cows and 34% buffalos produce milk and about 61% cow's milk
and46% buffalo's milk is sold inthe open market. Basedon the data gathered, it is assumed that
improved water supply in the villages will result in 5% increase in milk production along with
improvement inthe quality o fmilk, benefiting 40% o f the villagers.
77
10. The benefits due to time saved in water collectionfor cattle will accrue to about 30% o f
the cattle for whom considerable time is currently spent in taking the cattle to the water source.
In 20% o f such cases, water is fetched from a distance of 100 meters and time taken is 20
minutes per trip, with 2 trips beingtaken ina day. For the rest 10% cases, water i s fetched from a
distance o f more than 100 meters and the time taken is 35 minutes per trip. The time saved is
valued at the opportunity cost o f labor.
11. The benefits from selling offish due to renovation of pond are also considered for the
economic analysis. The annual revenue generation through sale o f fish from one hectare pond is
2.5 tons @ Rs.30/-per Kg. This benefit will accrue to 1000 habitations / ponds.
12. Apart from the above benefits, other benefits expected from the proposedproject include
environmental and institutional strengthening and capacity buildingbenefits. But these benefits
have not been quantified.
13. Project Cost: The total proposed project cost including the water supply and
environmental sanitation i s Rs.1122 crores for the entire SWAP. The average unit cost (Rupees)
o f capital investmentper capita for SVS tube well (NC); SVS tube well (PC); SVS canal; MVS
tube well (NC); MVS tube well (PC); MVS canal are: 1893, 1284, 1381, 1019, 2000 and 1750
respectively. A wide variation in cost i s expected across villages, depending on the number of
households in the village, new schemes to be provided, and the extent o f augmentation o f
existing water supply schemes. The O&M cost depends on the type o f scheme and varies from
Rs.2 to Rs.5 per kilo liter o f water (includes bulk water and intra-village O&M cost for MVS).
The above costs are extrapolated for the entire Program, based on the following phasing o f
schemes: 3 % o f schemes expected in the first year, 7%, 29%, 30% and 32% in second, third,
fourth and fifth year respectively. The software cost (including capacity building and program
management) are extrapolated based on the projections for six years: 1.7%, 5.1%, 19.9%, 29.3%,
31.2% and 12.9% in first, second, third, fourth, fifth and sixth year respectively. The overall
benefit-cost analysis is based on the phasing and mix o f schemes as given above.
14. ERR and SensitivityAnalysis: The ERRofthe SWAP program is estimated to be 23%.
Sensitivity analysis based on assessed risks indicate that the program is able to absorb negative
impacts and still generate positive ERR:
a Significant decrease inbenefits or increase intotal costs: A 54% increase intotal costs or
a 36% decrease intotal benefits, or a combined 21% increase in total costs and decrease
intotal benefits reducestheprojectERRto 12%;
a Delay inimplementation :Ifbenefits are delayed by 3 years, the ERR falls to 12%;
0 Significant decrease in benefits or increase in water supply costs: A combined 26%
increase inwater supply cost and decrease inbenefits reduces the project ERRto 12%;
a Failure o f schemes: If50% o f water supply schemes fail after 10 years the ERR reduces
to 18.5%
78
the COSZS Decrease
and t u Be
79
Fiscal Impact of Punjab RWSS Project on GoP Rudget
Source of Funds 1 2006-07 1200748 2008-09 2009-10 2010-11 2011-12 'l'otal
expenditure will be more in the first three years, due to the completion o f ongoing and
committed schemes. However, even during these years, this represents an increase of only about
15% from the current levels o f RWSS sector allocations by the GoP from its own Plan
Allocations. The net impact o fthis on the GoP budget i s not expected to be substantial.
Table 2: GoP Plan andNon-PlanBudget
-
Source: based on GoP'sBudget documents
17. Besides the counterpart funding and debt servicing, no additional recurrent O&M costs
are expected to be borne by GoP since these would be met through user charges collected by the
GPWSCs. In addition, it i s also expected that with the successhl implementation o f the SWAP
Program, it will be possible for the DWSS to reduce its current non-plan allocations (US$7.5
million per annum) on operations and maintenance o f existing water supply schemes as schemes
are transferred to GPs and reduction in staff costs because o f curtailment on new recruitment and
gradual rationalization o fbulkwater charges for MV schemes.
81
Annex 10: SafeguardPolicyIssues
INDIA: PunjabRuralWater Supply andSanitationProject
Introduction:
1. The program is not expected to have significant adverse environmental and social
impacts and has been classified as a Category B project. However, the program does have the
potential to offer significant opportunities to hrther environmental and social development
objectives. Safeguards Management Planning has been prepared following Social and
Environmental Assessments by independent consultants.
Key StakeholdersandConsultation
2. Key program stakeholders were identified and consultations held to seek their views and
incorporate the same into designing o f the program. Grassroots level stakeholders include: (i)
benefiting households (including women, poor, Scheduled Castes, and the hamlets); (ii)GPs
(men and women elected representatives), (iii) Junior Engineers o f DWSS, and (iv) other
community based organizations. Block/ district and State level stakeholders are: the respective
Panchayat Raj Institutions; other concerned line departments such as health, rural department,
power, irrigation; district/ block administration; the DWSS; and non-governmental
organizations, contractors/ suppliers and consultants. Departments o f Finance, Drinking Water
Supply & Sanitation, Rural Development and Panchayat Raj, Science and Technology,
Irrigation, Health, political leaders, NGOs and consultants. There have been consultations
throughout the project preparationbothby the Bank Missions as well as by the GoP.
Social andEnvironmentalAssessments
3. Social Assessment comprised: (i)Beneficiary Assessment (BA), (ii)Stakeholder
Analysis (SA), (iii) Institutional Analysis; (iv) Impacts Assessments; and (v) Risk Analysis. BA
enabled building socio-economic profiles at the national, district, Upazilla, union and village
level; the project beneficiaries' assessment on the current status o f research/extensiodmarketing;
and their linkages with governance/management mechanisms. SA resulted in identifying
stakeholders at different levels and mapping the key expectations, issues and concerns as related
to each stakeholder and the sub-groups thereof. Institutional analysis led to documenting and
analyzing the existing institutional arrangements, conducting a SWOT exercise, and formulating
inputs into designing o fthe decentralized extension delivery system inconsultatiodcollaboration
with the stakeholders. This was followed by impact assessments and risk analysis. The results
helped in designing the delivery system and addressing safeguards, thus ensuring positive and
sustainable impacts.
4. DWSS, with assistance o f consultants, has conducted an Environmental Assessment (EA)
study, which comprised an assessment o f the current status o f rural water supply and sanitation
inthe state, status of the water resources availability for sourcing of drinkingwater interms of
quantity and quality, identification o f baseline environmental issues pertaining to rural water
supply andsanitation, institutional andpolicy assessment, expected environmental impacts o fthe
proposed project interventions and proposed mitigation measures, development o f an
Environmental Management Framework (EMF), and institutional arrangements for
implementation o fthe EMF.
82
5. As a part of this environmental assessment, DWSS has also carried out a water quality
sampling in 40 villages across the state, whereby the quality o f the drinking water available in
the village was tested both from the private sources as well as from the DWSS schemes. The
quality was assessedinterms o fthe standardphysical, chemical andbacteriological water quality
parameters, and supplemented by other tests (like pesticides and heavy metals concentrations)
wherewarranted.
6. The findings o f the EA study indicate that while the proposed project interventions are
expected to result inoverall environmental and public health improvements inthe state, potential
adverse impacts could occur if the schemes are not properly designed, sited, implemented, and
maintained. To this end, an environmental management framework (EMF) has been developed
for identifying and addressing any possible adverse environmental impacts o f the project
interventions. Institutional arrangements for the implementation o f the EMF have been agreed
with the GoP.
Social Issues:
7. The program recognizes that Punjab i s quite diverse on socio-economic, geo-physical,
and strategic fronts. Major issues relate to:
(i)inclusionandequity-ensurefair andequalopportunitiesforparticipationin,and
derive benefits from, the program by all the communities and their subgroups such as
scheduled caste, women, women headed households, residents o f international border
villages; (ii)decentralization - devolving the decision making along with control over
resources to the local self governments and user groups; (iii) customer base and demand
generation - marketing the program and deriving home the health and hygiene benefits;
(iv) capacity support/ building - not only government agencies need to transform
themselves into facilitators, but arrange support and capacitate the LSGs anduser groups.
Environmental Issues
8. Water Availability: Shallow groundwater has traditionally been the major source o f water
for drinking, irrigation and industrial uses in Punjab. Owing to large-scale extraction of
groundwater for irrigation, combined with increasing demands inother sectors due to population
and industrial growth, the shallow aquifers in large parts o f Punjab are in the state o f over-
exploitation, resulting ina significant ongoing decline ingroundwater levels. For a large number
o f rural households which are not covered by public water schemes and which are dependent on
private sources like the shallow hand-pumps or tube-wells, the declining groundwater levels
have adversely affectedthe water supply.
9. Although about 80% o f the current and proposed DWSS schemes inPunjab are based on
groundwater supply, the water is sourced from the deep aquifer layers, rangingindepth from 75-
300 M. This water supply for drinking water from the deep aquifer i s quite abundant from the
perspective of ensuring long-term source sustainability. About 20% of the water supply schemes
in Punjab are based on canal-water supply, and in some cases the water supply is adversely
affected duringthe periods o f canal maintenance shutdown.
10. Water Quality: The groundwater quality inmany parts of Punjab i s poor owing to natural
presence of salinity and fluoride at concentrations exceeding the permissible levels for drinking
water use. In addition, the water quality o f groundwater may also indicate bacteriological or
chemical contamination due to inadequate treatment and disposal o f sullage, effluent from septic
83
tanks or industrial discharges. According to DWSS estimates, about 44% of the total 12,278
villages in Punjab suffer from poor water quality conditions. Specifically, (a) Salinity is a
significant problem in districts o f Bathinda, Sangrur, Faridkot and Firozepur; (b) Prevalence o f
fluoride in groundwater is indicated in Ludhiana, Faridkot, Bathinda, Sangrur, Jalandhar and
Amritsar; (c) Nitrate i s present in Patiala, Faridkot, Firozepur, Bathinda, Sangrur and Muktsar;
(d) Inaddition, isolated pockets o f Ludhiana and Bathinda have been reported to have presence
o fheavy metals andpesticides, respectively, inshallow groundwater.
11. Due to its higher depthandrelative hydro geological isolation from the shallow aquifer,
deep groundwater is expected to be free from the presence of bacteriologicalkhemical
contaminants.
12. Environmental Sanitation: 49% o f the rural households in Punjab have household
sanitation coverage, and the main factors affecting the status o f sanitation inthe villages are the
following: (i) Wastewater generated by the households, including the wastewater from cattle-
sheds, flows into open surface drains leading to stagnation inthe lanes andby-lanes(ii) Without
adequate arrangements for treatment and disposal, the wastewater often seeps into hand pumps,
open dugwells and pipelines, and the water quality o f the village ponds has deteriorated leading
to loss o f productive uses and contamination o f the shallow aquifer. (iii) Incidences have been
reported o f effluent overflowing from the septic tanks and finding its way to the village drains.
(iv) The presence o f stagnant water inthe villages is linked to the incidence o f malaria and other
vector-born diseases. (v) Due to a combination of poor environmental sanitation and poor
personal hygiene, diarrheal diseases, cholera and typhoid cases have been commonly reported in
the rural areas.
13. Plans have been made to identify, develop, pilot and adopt several innovative sanitation
measures to address the issue o f sullage water disposal as well as solid waste management.
Safeguards Management
Social Safeguards:
14. N o lands will be acquired involuntarily andhence OP 4.12 is not triggered. So i s OP 4.12
as there are no tribal (indigenous peoples) habitations in Punjab.. The program, however, does
need landsandmechanisms o f securing the same are detailedbelow.
15. Land Availability: Landrequirement arises for four purposes: FOR (i) source; (ii)
water
water treatment plants; (iii) construction of ground level or overhead tanks (G/OHT) or cisterns;
and (iv) Water transmission and distributionpipelines as well as sullage/ storm water drains.
Water sources could be either ground water or imgation canal based. The ground water sources
do require `land' and so is the case with WTPs. Inthe case o f tanks, ifthey are constructed in a
place other than that o f the `source, separate landwill be essential. Transmission and distribution
lines are laid mostly inpublic landor along public streets andno landneeds are to be secured. In
a few cases, pipelinesmay have to pass through private agriculture fields. Since the pipeline are
laid at least 90 cms below ground elevation, no land acquisition i s needed, but permission fiom
the land owner i s taken. If such permission is not forthcoming, then alternative pipe routing is
used, even ifit is more expensive to do so. This means, lands are required for SI No (i), and
(ii)
(iii). these, itisatraditioninPunjabthat, therespectiveGPand/orcommunitiesshould
For
make lands available, else, no construction is planned.Most villages have some public lands and
84
the same are made available. The same tradition will continue in respect o f the program
constructiontoo.
16. Inthe case o f MV water supply schemes, the village which houses the source and WTP
will need to make available lands much more than the other participating villages. Then, the
village offering land shall be compensated duly by other benefiting villages. The GP offering
lands shall pay 30% less o f the required capital cost contribution and the same shall be borne
dulybythe other GPs.
Environmental Safeguards:
17. OPBP 7.50 (Proiects on International Waterways) Based on a technical consideration o f
the proposed project interventions, the hydro geological characteristics o fthe deep aquifers, the
state policy on provision o f canal water for rural water supply schemes, and inthe context of the
Bank's determination o f the applicability o f OPBP 7.50 (International Waterways) on a case-by-
case basis, it has been determinedthat the proposed project activities do not trigger OPBP
7.50. This determination is based uponthe provisionthat no bore-wells will be installed within 1
kmo fthe line demarcating the internationalborderbetweenIndiaandPakistan.
18. OPN 11.03 (Cultural Propertv) The mission deliberated extensively on this policy inthe
context o fRWSS Projects/ schemes inIndia ingeneral, andPunjab, inparticular. Inaddition,
experiences from the Bank assisted RWSS projects inthe last decade-and-a-half (across the
states) were also taken into cognizance. InPunjab,the Department o f DrinkingWater Supply
and Sanitation (DWSS) itselfhas constructed some 2,000 deep tube wells so far. Further, it is
estimated that number o f tube wells dug for irrigation could be close to a million. Moreover, the
Banktoo has financed some 7 RWSSprojectsinIndiaaccounting for about 7,000 groundwater
based schemes inthe last decade and a half. So far, the issue o f cultural property has not arisen.
Based on all these, a decision is made not to trigger the policy.
19. Water Ouantitv. Source selection will be conducted with due regard to ensuring year-
round adequacy o fwater supply and long-term sustainability o f the resource. More specifically:
a The current DWSS design practice ensures that water supply for ground-water based
schemes is sourced from deep aquifer, with depth ranging from 75 M-300 M. The EA
study, supplemented by inputs from regional groundwater experts, indicates that the
current and expected future drinking water abstractions from the deep aquifer are small
compared to their estimated sustainable yield, andtherefore source sustainability for deep
groundwater-based schemes is ensured.
a Inareas where deep aquifers are saline, canal-based schemes will be implemented, if
adequate year-round supply can be guaranteed through storage or other measures.
20. Water Oualitv. The sitting, planning, design, and operation o f the schemes will ensure
that source selection is conducted with due regard to water quality o f the source, and that water
quality at householddelivery level meets the drinkingwater norms. More specifically:
a Due to its higherdepth and relative hydro geological isolation from the shallow aquifer,
deep groundwater is expected to be free from the presence o f bacteriologicallchemical
contaminants. Conventional water quality parameters for DWSS's deep groundwater-
based schemes indicate acceptable water quality for drinkingpurposes.
a However, inview o f the traditional emphasis on shallow groundwater quality and due to
emerging concerns regarding possible presence o f industrial or agricultural chemicals in
85
some locations, the project will commence and support a systematic assessment o f deep
groundwater quality inthe state.
0 Effective and regular disinfection, as well as preventive and corrective maintenance o f
water distribution systems will be ensured.
0 A protocol for regular water quality testing and control has been developed, which will
be implementedthrough the operations phase o fthe water supply schemes.
21. Sanitation. The project will support interventions on environmental sanitation to ensure
that the benefits o f improved water supply are not compromised by poor personal hygiene
standards, and inadequate drainage, sullage/wastewater treatment and disposal. More
specifically: (i)The project will support sustained IEC campaign to create and enhance
awareness on hygiene aspects pertainingto hand-washing, water collection, storage and handling
practices (ii)The project will support, on demand basis, drainage improvement schemes for
improving sullage drainage, addressing effluent overflow from septic tanks into village drains,
installing small-bore sewers/ sewerage systems and undertakingponds rehabilitation.
22. Inaddition, the EMFprescribes measures to ensure that: (i) borewells are installed
no
within 1 km o f the line demarcating the international border between India and Pakistan, to
prevent the possibility o f cross-border groundwater impacts. (ii)the temporary adverse
environmental impacts associated with construction-stage activities are systematically addressed
in the project-sponsored schemes.(iii) appropriate environmental monitoring indicators are
integrated in the overall project M&E systems (iv) adequate resources are provided for
environmental awareness and capacity buildinginvillage communities, GPs and DWSS staff (v)
adequate resources are provided for a thorough assessment o f the water availability and quality
indeep aquifers
ImplementationArranpements:
23. Safeguards implementation and oversight arrangements have been developed keeping in
view that the proposed program will adopt a sector wide approach (SWAP) irrespective o f
hnding sources. Essentially, the safeguards managementwill form an integral part of the
overall scheme cycle including sub-project appraisals and monitoring implementation.
Towards ensuring this, DWSS will re-define its role, changingfrom builder /provider to that o f a
facilitator/ partner and will shoulder responsibility for state wide leadership, collaboration and
management o f RWSS sector including undertaking IEC, safeguards, arranging capacity support,
Quality Assurance as well as monitoring and evaluation of outputs and outcomes. To enable this
transformation, the exiting DWSS structure has been re-organized such as to provide for two,
rather independent, channels - one, the Program Facilitation and Monitoring Wing, and the
other, Operations Wing. The former, with an unitary structure (through the district), a State
Water and Sanitation Program Management Cell (SPMC) and a District PMC, will be
responsible, among others, for safeguards management. The operations Wingwill be largely the
current DWSS set-up with Regional Chief Engineers and the existing offices o f Circles,
Divisions and Sub-divisions. They will be responsible for providing technical support, including
safeguards management, to the GPs and communities. The DPMCs will be guided by a District
Water Supply and Sanitation Committee (DWSC) headed by the President o f the Zilla Parishad.
Grassroots level management decision making including construction fund management and
procurements will rest with GP and the associated sub-committee, GPWSC.
86
24. The SPMC and DPMC staff will include Environmental-cum-Social Development
Coordinator charged with the overall responsibility o f ensuring the implementation o f the
environmental and social development aspects. DWSS beingchiefly an EngineeringDepartment,
non-engineering skills necessarily needs to be supplemented. For this, the Cell will outsource
professional management consultants, at the state as well as district levels. These consultants
will:
e Provide experienced personnel in managing community development interventions
including safeguards, as well as monitoring and evaluation including process monitoring
and impact assessments.
e Support Program Director in developing and guiding implementation o f capacity
building, IEC, and communication.
e Assist the Program Director in the preparation o f progress reports as well as in
consolidating the key learning, document the same and disseminate it statewide.
25. The consultants will, inparticular, assist the SPMC in: (i)developing and disseminating
alternative mechanisms to reach andwork with the communities viz., participatory management
techniques and methodologies as well as safeguards; (ii) drawing strategies and implementation
action plans transparency, inclusion and accountability; (iii)designing and adopting change
management approaches, in particular, and capacity building, in general; and (iv) designing,
rolling out and maintaining a web site reflecting status and progress in the RWSS sector in the
state. It is expected that the DWSS will acquire/ learn the non-engineering skills (supplemented
byPMC) within 2-3 years andthereon the same will be managed in-house byDWSS.
26. Additionally, a state level environmental resource agency will be contracted to provide
environmental capacity building, to conduct environmental audits and to provide technical
support as and when required. Similarly at the district level, each of the 18 DPMC will include
an Environmental/ Social Development Specialist in their staff, who will be responsible for
providing environmental support and supervision to each project-scheme in the district. In
addition, a panel o f environmental experts will be constitutedineach district to provide technical
support on as requiredbasis. At the village level, the awareness and capacity for environmental
management in the local GPWSC and SO would be enhanced through a targeted training and
capacity buildingprogram.
87
Annex 11: Action Planfor EnhancingTransparency and Accountability
INDIA: PunjabRuralWater Supply and Sanitation Project
1. The recent enactment o f the Right to Information Act (RTI) has created additional
opportunities for enhancing transparency and accountability. Arrangements under this project
will make use o f this opportunity to enhance disclosure o f information facilitating civil society
oversight resulting in increased accountability. Enhancing disclosure will require a change in
mind-set and behavior that can be encouraged with incentives and remedies. The agreed action
plan builds upon the numerous actions that have been agreed under this project to enhance
transparency and accountability actions for procurement and other activities under the Project.
2. The key elements o fthis strategy include the following:
a) Enhance disclosure o f information;
b)Facilitate civil society oversight;
c) Develop a creditable systemto handle comments, suggestions and grievances;
d) Define clearly incentivesandremedies available;
e) Develop monitoring indicators for compliance to the above agreements and for impact
on outcomes
a) Enhanced disclosureof information
3. The project has developed the following outline o f a disclosure policy that will be further
fine tuned and details developed during implementationbased on the experience gained.
Outlineo fthe Disclosure Policy andAction Plan
4. The intent o f the disclosure policy is total compliance with the RTI Act both for on-
demand disclosure and suo mot0 disclosure. This enhanced disclosure o f information to the
citizens i s expected to facilitate civil society oversight. However, the information needs to be
maintained and provided in a manner that will maximize the utility o f the information. The
following table details the suo mot0 disclosures by DWSS/ GoP.
Topics . Documents to be disclosed Frequency Mode
Project Scope Project Appraisal Document o f the Once when Project . DWSS website.
Bank Financed Project Agreement i s signed
Community and Village selection for each batchI DPMC & ZP office notice board
Infrastructure 1. No. o f applications received scheme /DWSS website
Development 2. No. o fPrioritizedvillages
3. List o f Implementationphase
proposals approved by SWSM and
DWSC with salient features o f the
.. scheme. ..
4. Scheme completionreport for each
scheme
Status o f coverage o f habitations Yearly DWSS website
User satisfaction surveys Once inevery 2 years DWSS website
Environmental Environment Assessment Summary Draft final report has 1 WorldBank's Info shop.
Management been disclosed. 2 Punjab Environment Information
Complete EA report system's website.
finalized after 3 DWSS website
appraisalwould be
disclosed and remain
88
Topics Documents to be disclosed Frequency Mode
available throughout
the entire project
cycle.
Database on District wise water A systematic 1 Punjab Environment Information
resource maps including water quality assessment o f deep system's website.
o f each dnnking water resource. ground water quality 2 DWSS website
& canalbased 3 Office o f SPMC & DPMC
resources from each
water supply scheme
inthe state isbeing
conducted once inthe
entire project cycle as
district wise
assessments are
completed the
database would be
made available to
public through
website .
Periodic report o f water quality Water quality 1 Punjab Environment
including testing for heavy metal & monitoring including Information System's website.
pesticides. testing for heavy 2 DWSS website
metal & pesticides 3 Office o f SPMC & DPMC
would be conducted.
Annual updates would
be made available to
public through
website
Financial At Proiect level Before the start o f the DWSS website throughout the life
Management i)ProjectFinancingPlans project andupdated regularly.
ii)Budgetaryallocationfortheproject Yearly DWSS website.
iii)Progressreport(financialand Quarterly/ Annually DWSS website.
physical)
iv) FinancialManagement Guidelines Before the start o f the DWSS website throughout the life.
project
At GPWSC level Displayedo n a Sign board at Sites I
iv) Approved Cost and financing plan Before the scheme i s GPs
o f individual schemes officially launched
v) Different stages o f contract award As per the need Displayed on a Sign board at Sites
(bids, offers, evaluation, selection, IGPs
award)
vi) Expenditure statement Monthly Displayedo n a Sign board at Sites
IGPs
vii) Gram Sabha meetingnotices Prior to notice period Displayedo n a Sign board at Sites
requirement of calling IGPs
a Gram Sabha
Procurement Contracts awards for ICB [and LIB if Within 2 weeks o f UNDBonline, dgMarket and
applicable] containing following receiving the Bank's website o fDWSS. Inthis
information: no objection to the publicationDWSS shall specify that
[a] Name o f each bidder who recommendation o f any bidder who wishes to ascertain
submitted the bid contract award the grounds o n which its bidwas not
[b] bidprices as read out at bid selected should request an
opening explanation from DWSS. The
[c] name and evaluatedprices o f each DWSS shall promptly provide an
bid that was evaluated explanation o f why suchbidwas not
[d] name o fbidders whose bids were selected either inwriting or ina
rejected and the reasons for their debriefing meeting, at the option o f
rejection; and DWSS.
89
Topics Documentsto be disclosed Frequency Mode
[e] name o f the winning bidder, and
the price it offered, as well as the
duration and summary scope o f the
contract awarded
Ifafter publicationofresults of Within 2 weeks o f UNDBonline, dgMarket and
evaluationDWSS receives protests receiving the Bank's website o f DWSS.
/complaints from the bidders, and ifas no objection to the
a result o f analysis o f suchprotests revised
DWSS changes its contract award recommendationo f
recommendation and the Bank accepts contract award
such changes, thenthe revisedcontract
recommendations containing all the
above details shallbepublished.
Contract awards for National Within 2 weeks o f
Competitive Bidding: completion of DWSS website.
Publication o f results o f evaluation and evaluatiodreceiving
the award o f contract consisting o f the the Bank's no
same information as mentioned above objection to award.
for ICB and LIB.
Contract awards for Direct Contracting Quarterly inthe
containing the following information: format o f a UNDBonline, dgMarket, DWSS
[a] Name o f contractor summarized table website
[b] Price covering the previous
[c] Duration; and period
[d] Summary scope ofthe contract
Contract award for consultancies After award ofthe
containing the following information: contract. UNDBonline, dg Market, DWSS
[a] the names of all consultants who website.
submitted proposals;
[b] the technical points assignedto
each consultant;
[c] the evaluated prices of each
consultant;
[d] the final pointranking ofthe
consultants;
[e] the name of the winning consultant
andthe price, duration, and summary
scope o fthe contract.
The same information shall be sent to
all consultants who have submitted
proposals.
Contract awards for selection based on Quarterly inthe
the Consultants Qualifications and format o f a UNDBonline, dgMarket, DWSS
single source selection containing the summarized table website.
following information: covering the previous
[a] name ofthe consultant to which period
the contract was awarded
[b] theprice
[c] duration and
[d] scope o fthe contract
Overall project procurement plan After the Credit i s
including its updates. approved. Bank's website, DWSS website.
90
Topics Documents to be disclosed Frequency Mode
GPN, IFB, EO1 As applicable.
UNDBonline, dgMarket, DWSS
Procurement Manual after approval by Dec'06 website, LocalNewspapers.
World Bank DWSSwebsite
b) Facilitate civil society oversight
5. Civil Society Oversight is in-built into the project's resources allocation as well as
decision makingboth at grassroots and apex levels o f implementation and the same are described
below :
i) Village Selection.
. Villages are not selected by any external body. GPs desirous of
participating in the project would select themselves and initially seek an endorsement
from the Gram Sabha and subsequently apply to participate in the project. Applicant
villages will be prioritized based on 5 key parameters and the same will be used for
selection.
ii). CitizenBodv. Control over resources anddecisionmakinginrespect ofplanning,
procuring, find managing, implementing and operating and maintaining, rests with a
Village level Citizen Body, GPWSC, a broad based institution with their members
selected elected from the Gram Sabha. Due representation to women, scheduled castes
and other influential persons have been made. GPWSC will display the project details
including financial particulars prominently on a notice board and update the same on a
monthly basis.
iii). SocialAudit.Provisionfor Bi-annual social audits fromGPWSCs andother citizens,
with assistance from NGOshavebeenprovided for.
iv). NGO Participation. Project provides for enlisting the services o f NGOs for providing
community development support to the GPWSC and communities as well as build their
capacity such as to enable them exercise due diligence and ensure quality/ cost control.
VI. Tender Management. GPWSC members form an integral part o f a committee responsible
for tendering processes and award o f contract handled by themselves as well as DWSS.
All payments willbemade subject to approval from GPWSC (inthe case o f SV schemes)
andconcurrence fromScheme Level Committee(SLC) inthe case o fMV schemes.
vi). MOUs. A M O U will be signed among GPs, GPWSCs, SLCs and DWSS in respect of
each scheme outlining role andresponsibilities o f each actor.
vii). DWSC. At the district level, a DWSC is set up, headed by Zilla Parishad Chairperson
and with representation from GPs, Block Panchayats, district administration, RWSS
experts, district civil surgeon, and representatives o f the departments o f Education,
Information and Publicity as well as Members o f Legislative Assembly and that o f the
Parliament. This committee will oversee the program and be responsible for endorsing
village prioritization, annual plan reviews and implementation phase approval. This
committee will also address grievances (ifany).
4 Develop a creditable system to handle comments, suggestions and grievances
6. A system will be developed to handle comments, suggestions and grievances. This
systemwill include the following features:
establish a comments, suggestions and grievance handling system in DWSS with clearly
defined responsibilities andprocedures
91
establishing a "monitoring system" database** to monitor adherence to the standards
listed inthe Procurement Manual. This databasewould be online with restrictedaccess.
updating the "Procurement monitoring" data base on a monthly basis
listing and discussing all cases received andactions taken inthe monthly report
agreeing a standard protocol with appropriate triggers for carrying out investigation by
appropriate agencies including and actions to be taken
** The database should specifically allow: (i) complete and adequate record keeping and retrieval of all cases; (ii)
cases received, responses sent and actions taken by dates; (iii) response time and compare against an agreed
monitor
response standard, and (iv) publish a monthly, quarterly and an annual report based on an agreed format
AN ACTION PLAN
Transparency / Action to be taken Time line Action By
Disclosure aspect
A system needs to 1) A comments, suggestions and grievances handling June, 2007 SPMC
be developed to system, which includes maintaining a project log and filing
handle comments, to monitor status o f follow up o f each received comments,
suggestions and suggestions and grievances, will be established by the
grievances, which DWSS. The mechanisms will include provision for follow
will have clearly up investigations of substantial complaints by the internal
defined Auditors, or third party audit to ensure independency and
responsibilities reliability o f the system.
and procedures.
2) A comments, suggestions and grievances handling
component will be included at the DWSS web site
Sei 2007 SPMC
3) Updating the database & tracking o f the status o f
investigations and measures taken will be reported in
monthly reports to management and the Bank. Complaints Dec, 2007 and SPMC
deemed possible serious infringements may be further then annually
investigated by the Bank.
d) Define clearly incentives and remedies available
7. Ifas aresult ofany such informationprovidedbythe member ofthe public, cost savings
are achieved or charges o f misconduct and misappropriation are proven, such members o f the
public will be awarded some recognition such as a certificate o f excellence or felicitation at a
public ceremony with or without a monetary reward, DWSS will formulate general policy inthis
regard and after due approvals o f the GoP, announce these to the public as aforementioned.
Simultaneously strict disincentives will be announced for the erring members o f the departments.
8. DWSS will establish the remedial actions and sanctions for cases o f fraud and corruption
that are reported and for which evidence i s found and charges established after due process o f
investigation. This will include sanctions to government staff proven to be involved in such
cases.
9. Information regarding such cases, where lessons are learned and finds are retrieved, will
be widely published for information o f the members o f public. Strict procedures to ensure
anonymity o finformants will be enforced.
92
Transparency I Action to be taken Time line Action By
Disclosure aspect
Disclosure on 1 A policy describing incentives and June, 2007 DWSS
incentives and sanctions will be developed.
sanctions available
2 Publishingthe policy. Sept, 2007 DWSS
e) Develop monitoring indicatorsfor compliance to the above agreements andfor impact
on outcomes
10. The Bankwill monitor implementationofthese elements, through inter alia:
Disclosure o f information will be supervised mainly through (a) checking the
frequency and comprehensiveness of website updates and, (b) checking the
distribution of materials to key participating civil society groups & Panchayats (c)
checking the comprehensiveness o f information available at Public information
Kiosks.
Civil society oversiht will be supervised through reviewing the reported inclusion
o f Civil Society Organizations (CSOs) inproject activities, particularly their roles in
monitoring procurement and construction. More precise indicators shall be
developed during the first year o fproject implementationphase.
The complaints handling system and the system of sanctions and remedies will be
supervised mainly through (a) periodic review of statistics based on records kept on
the website o f DWSS and (b) field level checks to ensure that problems are being
reported and acted upon.
93
Annex 12: Decentralization and role of PRIs
INDIA: Punjab Rural Water Supply and Sanitation Project
Decentralization and Role of Panchayati Raj Institutions in Punjab'
1. Following the 73'd and 74th Constitutional Amendments, decentralization efforts in the
country have received increased emphasis in several states. Decentralization to Panchayati Raj
institutions (PRIs) inPunjab is also gathering momentum. For rural water supply and sanitation,
involvement o f local communities in planning, implementation and O&M management is
critical, and therefore, direct and effective participation o f GPs and even lower tiers at the
habitation level, through GPWSCs, i s a necessity. This provides an opportunity under the
proposed Punjab RuralWater Supply and SanitationProgram to strengthen the lowest tier o f PR
institutions inthe state.
2. Key Legislative Landmarks on Decentralization in Punjab. The village Panchayats in
one form or other existed very early in the villages o f Punjab. The three tier Panchayati Raj
System was introduced in the state in 1961. The existing Act governing the Panchayati Raj
Institutionsi s the PunjabPanchayati Raj Act 1994 which replaced the earlier Acts. The first State
Finance Commission (SFC) to make recommendations regarding principles for distribution of
net proceeds o f taxes levied by the State Government between the State and Panchayati Raj
Institutions was appointed in July 1994 and its recommendations covered the period o f 5 years
from 1996-97 to 2000-01. The second State Finance Commission was set up in September 2000
andrecommendationcovered the periodupto 2005-06.
3. The Organizational Set-up of the Three Tier PR System in Punjab. In Punjab, the
PRIs are within the mandate o f Department o f Rural Development and Panchayats (DRDP). The
three-tier organization set-up o fthe Panchayati Raj InstitutioninPunjab i s shown infigure 1.
4. GPs - The bottom tier of PRI is the Gram Sabha comprising o f every person who is
entered as voter inthe electoral role preparedbythe State Election Commission pertaining to any
revenue village or group o f contiguous villages having population not less than 2006. More than
one Gram Sabha can also be constitutedwith inthe boundaries o fthe same revenue village ifthe
population is above 500. Each year every Gram Sabha shall holdtwo general meetings one inthe
month o f December after the harvesting o f Swani crop called the Swani meeting and in the
month o f June after the harvesting o f Hari crop called the Hari meeting. The quorum for the
Gram Sabha is one fifth o f the total number o f members. The development plans and budget
estimates o f the GPs are discussed and approved in Swani meeting. The development plans o f
the previous year and statements of accounts are taken up in Harimeetings. A schedule for the
Gram Sabha meetings for each o f the village inthe entire Block will be prepared inadvance and
published. The dates for the meetings are thus permanently fixed and prominently displayed in
the village. BDPOs give wide publicity to the schedule o f the Gram Sabha meeting. A
representative o fthe BDPO will attend the Gram Sabha meeting. The Punjab PanchayatiRaj Act
provides that in the event o f the Sarpanch failing to hold two consecutive General Meetings o f
the Gram Sabha, the Sarpanch shall automatically cease to hold office7.
This note is slightly modifiedversion ofthe notepreparedbythe DWSS andthe Project Management Consultant.
6As per 2001 census the rural population of Punjab is 160.96 lakhs livingin 12,278 inhabited village comprising of
14,605 habitations. There are 12,447 GPs inthe State.
7Section 5 (2) ofthe Punjab Panchayati Raj Act
94
5. Each Gram Sabha elects from its members (Single constituency) a GP consisting o f a
Sarpanch and Panches (Multi member) based on the population*. The GP i s the Executive
Committee o f GramSabha and is the body corporate.
Chairpersons o fPanchayat Samitis inthe district
ctly elected numbersofthe ZP including
Officer of the rank of District Developmentand Panchayat Officer as Deputy Chief Executive Officer
PanchayatSamiti 141Nos. Blocklevel
-
Source: StatisticalAbstract of Punjab, 2004.
6. The Panchayat Secretary is in-charge o fthe office o fthe GP and performs the roles under
the control o f the Sarpanch and i s responsible to the GP. The GPs in a Panchayat Samiti area are
organized into Panchayat Circles o f 3 contiguous GPs. One Panchayat Secretary is in-charge o f a
circle. When the GPs are small, 5 GPs constitutes one Panchayat Circle. The Panchayat
Secretary convenes the GP meetings under the direction o f Sarpanch, records proceedings, and
maintains account books such as the cash book and stock register. The Panchayat Secretary also
acts as the link between the GP and Panchayat Samiti. The Junior Engineers are attached to the
BDPO and work underthe supervision o f Sub-Divisional Engineers. The Junior Engineer assists
the GPs in preparing technical estimates, inspecting the works implemented and in issuing
utilization certificates.
7. Section 25 o f the Punjab Panchayati Raj Act, 1994provides for constitution o f Amenities
Committee to perform functions in respect o f education, public heath, public works and other
finctions o f GP. The Sarpanch i s the ex-officio member and chairman o f the committee which
can have co-opted members as well as the prescribed number o f women and Scheduled Caste
members.
8. Punchuyut Samiti -The Panchayat Samitis are constituted for every block and consist o f
15-25 members directly elected from the territorial constituencies in the Panchayat Samiti area.
The Block Development and Panchayat Officer (BDPO) is the ex-officio executive officer of the
Panchayat Samiti.
For Population 200 to 1000five Panches, 1001to 2000 seven Panches for population 2001to 5000 nine Panches,
5001to 10000elevenPanches and exceeding 10000thirteen Panches.
95
9. The BDPO office has two branches, General Branch and Accounts Branch. The General
Branch to which Panchayat Secretaries are attached with are the employees o f the Panchayat
Samitis and i s under the direct administrative control o f Panchayat Samiti. The Accounts Branch
consists o f accountant, Gram Sewaks, two Junior Engineers etc. and are treated as on deputation
to the Panchayat Samiti. The Panchayat Samiti also has some staff from other departmentslike
Industries department, planningdepartment etc.
10. Zila Parishad - Zila Parishad (ZP) is the highest tier havingjurisdiction over the entire
district excluding the areas o f municipality, cantonments area or notified area. The ZP consists of
one member each directly elected from temtorial constituencies o f the district, all chairpersons
of Panchayat Samitis, members o f Lok Sabha and members o f State Legislative Assembly
representingapart or whole o fthe district.
11. The ZP Chairperson and Vice-chairperson are elected from the directly elected members
of Zila Parishad including Chairpersons o f the Panchayat Samitis. The chairman o f the Zila
Parishad i s also the Chairman o fthe DRDA.
12. The Additional Deputy Commissioner (Development) is the Ex-officio Chief Executive
Officer o f the Zila Parishad and Officer o f the Department o f the Rural Development and
Panchayats not below the rank o f a District Development and Panchayat Officer i s the Deputy
Chief Executive Officer. The staffing pattern except the post o f CEO and Deputy CEO differ
from district to district. Some districts have less than 10 numbers while some other have up to
100 staff inthe Zila Parishad.
13. Transfer of Functions to PRls. As per the Punjab Panchayati Raj Act the GPs are
empowered to construct, repair and maintain community assets based on "the availability o f
funds at its disposal". While Zilla Panchayats do not have any specific related functions, the Act
stipulates the "establishment, repairs and maintenance o f rural water supply schemes, prevention
and control of water pollution, and implementation o f rural sanitation schemes'' as duties of the
Panchayat Samitis. However, these may be overridden by the State Government through general
or specific orders. The hnctions relevant to the water and sanitation sector for GPs include:
0 "any public place includingits sanitation anddrains;
0 "wells, water-pumps, baolies, springs, ponds and tanks for the supply o f water for
drinking, washing andbathing;
0 "supply ofwater for domestic use and for cattle;
0 "prevention and control ofpollution;
0 "cleaning o fpublic roads, drains, tanks, wells and other public places;
0 "construction andmaintenance o fpublic latrines; and
0 Management and control o fwashing andbathing ghats.
14. Punjab Council o f Ministers decided in 2003 to transfer the functions of several
departments to the PRIs. In spite o f this major policy decision, the other departments are
functioning independent o f the PRIs with their own organizational structure. Departments like
Agriculture, Horticulture and Animal Husbandry are totally outside the PRI structure. Each o f
these departments has its own offices and manages their program through their own de-
concentrated offices at district or lower levels.
15. To implement the decentralization policy approved by the Council o f Ministers, the GoP
has devolved the functions and responsibilities for implementing the schemes and programs o f
the following six departments o f the state to the PRIs:
96
e Department o f Social Security, Women and Child Development
e Departmento fWelfare o f Scheduled Caste and Backwardclasses
e Department of Water Supply and Sanitation
e Departmento fRural developmentandPanchayats
e Department o f School Education
e Department o f Health and FamilyWelfare
16. DWSf - GoP has taken the decision to transfer 876 SV rural water supply schemes
beingrunby the DWSS to the GPs. Out o f the 774 schemes handed over to the GPs about 308
are operating the schemes. DWSS i s studyingthe experience and is inthe process o f drawingup
detailed guidelines for smooth transfer and successful O&M ofthe scheme by the GPs.
17. Department of Rural Development and Panchayats -The three tier PRIs implements
various schemes like Swaranjayanti Gram Swarozgar Yojna, Sampuran Gramin Rozgar Yojna,
Indira Awaas Yojna, Pradhan Mantri Gramodaya Yojna, Rajiv Gandhi PenduJan Sehat Kalyan
Yojna and Consolidated Rural Development Scheme.
18. Transfer of Functionaries to PRIs. Consequent to the transfer o f functions, the
deployment o f corresponding staff to the PFUs for the effective and efficient delivery o f the
various services i s being attempted. GoP is looking at the deployment o f staff to the PRIs both
from re-deployment o f those already working in various line departments and those to be
recruited fresh. GoP has prepared a detailed proposal to be implemented in a phased manner and
has been circulated among the departments for their consideration, acceptance and
implementation. The powers o f minor punishment to the employees transferred will be vested
with the PRIs for effective control and management.
19. Finances of PRIs. The Govt. o f Punjab has accepted the recommendations o f the second
Punjab SFC on the transfer o f financial resources to the PRIs as below:
4% share o f net proceeds o f all state taxes to be allocated between PRIs and ULBsinthe
ratio o f population; the share o f GPs i s 67.5%. The ZPz and PSs will not receive any
share o f this as they are entitled to a share on the auction money o f country liquor and
excise duty on IMFLwhich was considered as adequate to meet their expenditure needs.
The allocation o f share o f state taxes to PRIs in various districts is done using the
following criteria:
-- Criteria Weight age
Ruralpopulation ofthe districts as per 2001census 65%
Short fall o f per capita own income o f the GPs in the districts as compared to per capita 15%
-- own income of all the GPs inthe state
Population o f Scheduled caste inrural area ofthe districts 15%
Ruralpopulation inthe sub-mountainous areas o f the district 5%
m These funds are to be spent for development works in the village for purposes like
disposal o f Sullage water, rural sanitation, bio-gas plants, solar street lights, cleaning of
ponds with duck weed technology, construction o f community halls etc.
I Rs. 50 Crores per year from 2002-03 to 2005-06 out o f the total auction money o f
country liquor and additional excise duty on IMFLto be released to PRIs.
Earlier knownas Department o f Public Health.
97
The funds released to PRIs as per the second SFC are giveninTable 1.
Table 1-FundReleases to PRIs as per Second SFC Recommendations (Rs. I n Lakhs)
Financial Recommended
Year by SFC Actual Allocation Actual Release
2002-03 148.28 148.28 106.95
2003-04 161.58 83.85 12.39
2004-05 173.99 Nil Nil
21. The PRI own resources include: local taxes, income from Panchayat land, shops,
fishponds etc. All the rights o f the Shamlat landis vested with GPs andis a permanent source of
recurring income to them". Besides Shamlat lands some portion o f Mustarka Malkan lands are
also placed under the management and custody o f GPs. The details of own income o f PRIs are
giveninTable 2.
22. Duringthe year 2004-05, the total own income ofthe PRIs from leasing o f land was Rs.
7729.5 lakhs and Rs. 8380.80 lakhs during 2005-0611.As per the PunjabPachayat Raj Act, GPs
are also empowered to levy a "water rate, where arrangement for supply o f water for drinking,
irrigation or any other purpose is made by the GP inits jurisdiction".
FinancialYear Tax collected Income from Panchayati land, shops, ponds etc.
2000-01 116.38 8224.24
2001-02 151.49 8225.71
2002-03 106.87 9897.26
23. The funds released to the PRIs are tied to different developmental purposes and released
to the Panchayat Samitis and GPs through the District Development and Panchayat Officer. The
Zila Parishads directly receive h d s from the State Government; though the Go1 finds are
routed through the DRDA. The Zila Parishads release funds to Panchayat Samitis and GPs.
During2002-03 the Panchayats expended an amount o f Rs.20847 lakhs for various activities as
given inTable 3.
loVillage Common Lands (Regulation) Act, 1961.
l1Note preparedby Deptt. of Rural development and Panchayats.
98
Source: Annual Administrative Report of the Department of Rural Development and Panchayats, 2002-03
Source Amount (Rs. Lakhs.) Percentage
Grants from the Government 6850.8 40.8
Grants for local institutions 39.5 0.2
Donations 26.2 0.2
Income from disDosal o f refuge 87.3 0.5
Income from auction of fishponds 29.9 0.2
Income from Shamlat lands 6503.7 38.7
Income from house tax 78.3 0.5
Income from profession, octroi and other taxes 20.5 0.1
Income from voluntary contributions 38.9 0.2
Other 3105.3 18.5
Total 16787.6 100.0
24. Recent Policy Initiatives to Strengthen PRIs. GoP has taken various reforms initiatives
to strengthen the PRIs to improve their functioning. Its vision is to provide basic amenities for
good living and human growth to all rural citizens to bring about a visible improvement in the
living conditions o f the rural population in a time bound manner. While GoP will be providing,
enabling technical and administrative support, the PRIs will be in-charge o f execution o f the
programs and the policies. The focus o f attention for the PRIs in the Punjab will be to build
adequate basic rural infrastructure for education, health care, water supply, sanitation and
hygienepromotion, village roads etc.
25. Enhanced powers to PRh to Execute Development Projects - The GPs are now
authorised to sanction and execute works up to Rs. 10 lakhs. The corresponding limit for
Panchayat Samiti i s Rs. 20 lakhs. Zila Parishads can take up works o f any amount.
26. Panchayat Secretaries made Accountable to GPs - The disbursement o f salaries to the
Panchayat Secretaries has been linked to the GP certification o ftheir attendance.
27. Registrar ofBirths & Deaths - The Panchayat Secretaries have been designated as the
Local Registrars o f Deaths and Births inplace o f SHO o fthe Police Stations12.
28. Enhanced chequesigningpower at the village Panchayat -The cheque signing limitsat
the GPs level has beenenhanced for the smooth operationofthe bank account andtimely flow of
funds. The earlier and amended limits13are formalized by the Government Orders.
l2Punjab Registration o f Blrths and Deaths Rule 2004.
13Circular number 5/22/2005-410/7058dated 8-12-2005 o f Director, RuralDevelopment and Panchayats, Govt. o f
Punjab.
99
29. ZP Chairperson made chairperson of DRDA - The chairperson of ZP is also made the
chairperson of the DRDA. This will bring in direct supervision and control o f funds from Govt.
o f India on centrally sponsored schemes by the Zila Parishad.
30. Constitution of District Planning commit fee^'^ - District Planning Committees will be
set-up inevery district to consolidate the plans preparedbythe Panchayats and Municipalities in
the districts and to prepare draft development plan for the district as a whole. The DPC will have
15 to 40 members depending upon the population in the district. GoP has nominated the
Chairperson o f the ZPs to chair the DPC. Four fifth o f the total number o f members inthe DPC
will be elected by and from amongst the elected members o f the Panchayat at the district level
and o f the Municipalities in the districts. The proportion o f the elected members between the
Panchayat and Municipalities will be decided by the ratio between the population o fthe rural and
urban areas inthe district. The GoP from the Members o f Legislative Assembly and others will
nominate one fifth o f the total number o f members o f the committee. The Deputy Commissioner
o f the district i s the ex-officio Secretary o f the committee. The Additional DeputyCommissioner
(Development) o fthe district will be the Additional Secretary o fDPC.
31. The existing District Planningand Development Boardinthe state have beenreplaced by
DPC and DPC have the following key functions: (a) To prepare the draft District Development
Plans (b) To prioritize schemes and programs (c) To take measures for proper implementation o f
developmental programs (d) To encourage Panchayats and Municipalities to take up and
expedite developmental programs (e) To make efforts to generate additional resources for
developmental work.
32. Capacity building of PRIs. Based on a SWOT analysis of the PRIs in Punjab the main
areas o f capacity buildingsupport required include:
Human resource capacity:
rn Capacity building programs for elected representatives including orientation
programs, interactive and feed back sessions and exposure visits etc.
rn Training programs for re-deployed andnewly recruitedofficials ofthe PRIs.
rn Information, education, orientation programs and campaigns for the village
community.
Institutional capacity:
Provision o f office building, community centers, information centers etc.
especially to the GPs.
rn Developing and instituting systems and procedures for planning, monitoring and
governance. This may include developing and implementing accounting and
financial management systems, participatory planning methodologies, developing
guidelines etc. including preparationo fmanuals.
Financial capacity:
The grant-in-aids and other find flows to the PRIs need to be timely and
streamlined.
The flexibility to plan for local needs and priorities o f the village communities
can be achieved only by increasing the untied portions o f grants to the PRIs,
which i s currently filly tied to state level and central schemes.
14The Punjab District Planning Committees Act (Number 22) of 2005 vide Punjab Government Gazette,
Extraordinary, Published by authority.
100
33. The DRDP has two training centers to impart pre-service and in-service training to
officials o f the department: State Institute o f Rural Development, Nabha, Patiala district and the
Community Development Training Centre, Batala, Gurdaspur district.
34. GoP is engaging NGOs and other professional organizations such as the Institute for
Development and Communication (IDC), Centre for Research in Rural and Industrial
Development (CRRID) for under taking information education and communication campaigns,
to conducting capacity buildingprograms for the elected representatives o f the PRIs advice on
capacity building issues etc. A capacity building project worth Rs.5 Crores has been
implemented for buildingthe capacity o f elected representatives. The capacity buildingprograms
covered areas like powers and responsibilities o f the elected members, accounting and financial
management, Panchayati Raj Act and legal provisions etc.
101
Annex 13: Social Assessment
INDIA: PunjabRuralWater Supply andSanitationProject
I Introduction
1. This note reflects the proposedproject's social assessment based efforts towards building
the elements o f decentralized RWSS service delivery. Initially, social development issues and
concerns related to decentralization o f RWSS service delivery are identifiedbased on beneficiary
assessment, stakeholder analyses and social impact assessments. These are supplemented with
the issues emanated from: (i) Performance Assessment Studies (PAS) conducted as a part o f
understanding and appreciating the investment requirements; (ii) experiences o f piloting the
program, currently underway; and (iii) external evaluation study sponsored by the National Bank
for Agriculture and Rural Development (NABARD). A discussion on the issues and concerns
form a basis for designingthe delivery system. The results are presented in six sections. Section
IservesasanIntroduction;SectionI1onthebeneficiaryassessment,presentsthecharacteristics
o f the prospective benefiting community groups and sub-groups. Results of the PAS and
NABARDevaluationstudies aswell aspiloting experiences are presentedinSection111. Section
IV covers the identification of stakeholders, their key perceptions/ expectations about/ from the
project, potential benefits/ risks/ impacts and conflicts of interests (if any) in respect o f each o f
the sub-groups. Major issues to be encountered and the design features o f the proposedproject
addressing the same are presented inSections V and VI.
I1 BeneficiaryAssessment
A. Socioeconomic Profile o fPuniab State
2. Punjab covers an area o f 50,362 Sq Km, amounting to 1.5 % of the total surface in
India". The state has a population o f about 24.3 million (census 2001) with 66% o f the
population living in rural areas. Literacy i s close to 70% and the sex ratio is 874. Scheduled
Caste persons account for about 30% o f the total population and 80% o f them live inrural areas.
As per 2001 census there are 12,278 inhabited villages in the state comprising o f 14,605
habitations and2.8 million households. Population livingbelow poverty line is about 6%.
3. Topographically, the state i s mostly a plain and can be dividedinto three regions: Majha,
Doaba and Malwa. The rivers flowing through the state mark the boundaries of these regions.
Overtime, each region has developed into distinct regions, separate in their physical
environment, economic structures, social organizations and cultural pattern. Majha, locally
called the `Upper Bari Doab'(l7% o f the total area) region has a long international boundary
adjoining Pakistan. Doaba is the tract o f land between the rivers Beas and Sutlej, i s a cultural
buffer zone and adjoins the neighboring state of Himachal Pradesh through Shivalik hillranges.
This has a ravine-ridden belt in the area bordered by the Shivaliks called the `Kandi'. Malwa
forms the largest region (65% o f the total area and the political center of the state. While inter-
regional differences are quite high, a region has some uniformity in geography, climate,
vegetation, soils, drainage, livelihood and cultural environment.
-l5www.punjabgov.net/about-at-a-glance.asp
Data are drawn from: StatisticalAbstract o fPunjab, Government of Punjab, 2005, and the state's official website-
102
4. The state's geographical area is about 5.3 million hectares, and 80% of which are under
cultivation. Punjab is recognizedas the `food basket' or the `granary' o f India, as it contributes to
40-50 percent o f Rice and 60-70 percent o f Wheat to the India's Central Pool. The state produces
20 percent o fwheat, 9 percent o f Rice and 14percent o f Cotton of the total country's production.
Punjabhas been at the forefront o f India's green revolution, which dramatically transformed the
state economy. However, this was followed by a tumultuous period o f Naxalite inspired
militancy and subsequently, hard core religious militancy in the 1980s which impacted
substantially the life o f the people. The state jumped back to normalcy during the 90s and has
recorded highlevels o f economic development. It ranks the highest inthe country interms o fper
capita income (Rs26,OOO per annum- 2001-02), energy consumption (almost 2.5 times the
national average), 100% rural electrification, andmost villages having Pucca road connectivity.
5. The impact of the green revolution had differing impacts on the three regions. While in-
migration o f agricultural laborers increased manytimes, out-migration o f Punjabis to the western
countries, inparticular, from the Doaba region too became quite significant. Money remittances
from overseas communities were investedinthe construction o fhouses, purchase/ develop lands
and to buy agricultural implements. Recruitment in the army has always been an important
adjunct to the agricultural economy, adding on to the remittances. However, the trend o f
supplementing agricultural income from other sources was unevenly spread through the different
regions. The Doaba region was foremost inthis trend, followed by Majha and, only a part o f the
Malwa region. One area where the impact o f the Green Revolution was least felt was the Kandi
region which continues to remainbackward on social and economic fronts.
6. The economic transformation o f rural Punjab is thus chiefly due to green revolution led
agricultural development. However, this had its impacts on social front resulting indilution into
caste rigidities and the emergence o f the middle and rich peasants as the dominant peasantry in
the state. A significant feature o f the agrarian society in Punjab is the numerical preponderance
o f Jat Sikhs (owner farmers) in rural areas. Equally good in numbers are the Scheduled Castes
(SC) who form the major labor force. The traditional `joint family' system started vanishing, to
be replaced by the `nuclear family' which has led to more usage o f hired laborers and
consequently in-migration. Political equations too changed, and the power base shifted from the
urban rich to the rural elites. With the result, agriculture became the focal point o f attention. But,
agriculture currently has reached an asymptote, and environmental degradation has set in(nearly
half o f irrigation water used for agriculture is found to be polluted), economic returns are not
only lower but associated with risks and social issues (very highproportion o f labor class in the
society, in- and out-migration, international border conflicts affecting adversely the border
villages etc).
7. Literacy and Gender. As per Census o f India 2001, overall literacy rate is about 70%
(male-75%; female -65%), doubled in the last 3 decades. The same in respect o f SCs is lower
(56% overall, and 48% female). However, the absolute number of illiterates remains still quite
large. Punjab society consists o f hierarchies based on caste, class and communities. Inaddition,
there is another dimension - gender. Gender discrimination is more pronounced inthe state than
others. Punjab has shown a consistently an adverse sex ratio over time. While the country's
overall sex ratio works out to 933 females per 1000 males, it is 874 in Punjab. This is despite
high levels of economic development, in fact, it ranks quite high in terms of Human
Development Index (HDI)16.Punjab ranks 5th inHumanDevelopment Index inthe country, but
l6GovernmentofIndia2001, "National HumanDevelopmentReport", PlanningCommission, New Delhi-
abstractedfromthe HumanDevelopmentReport, UNDP, 2004 -- www.undp.org.in/hdrc/shdr/punjb.HDIis
103
it is as low as 16`h in Gender Equality Index (GEI). Inter-district GEI differentials too are also
high.Thedeclining sex ratio, risingrates offemale infanticide and foeticides, the poor workforce
participation o f women, restriction o f women in the informal sector where there is a high
incidence o f exploitation, the high rates of crimes against women and continued exclusion o f
women from the public sphere, indicates that the overall quality o f life is yet to catch up with the
higheconomic prosperity inthe State.
B. Water Supply and Sanitation Scenario -Puniab State
8. Punjab has a variety o f water sources from which people draw water for domestic
purposes. Some are public, and others privately owned. Each source has a definite potential in
terms o f service it can deliver and the extent o f household coverage. Performance o f the
hnctioning however depends upon several factors, some external (like power supplies) and
others internal to the service provider. Salient features and coverage status as on December 31,
2005, o fthe state's water supplies are presented below:
i. Ofthe 14,605 habitations, 6262 (about 43%) are fully covered (FC)17; 4082 (28%)
.. Partially Covered (PC); andthe remaining 29% not covered(NC).
11. Handpumpsare the main stay -a third o f them mechanized -usedby as highas 78% o f
... the households.
111. Rural Water Supply investments have been made for the last 3 decades under several
schemes - Minimum Needs Program (MNP)by GOP; Accelerated Rural Water Supply
Program (ARWSP) by GOI; Rajiv Gandhi Sub-Mission Program (by GO1 and GOP);
Loan Assistance from NABARD; Swajaldhara -Iand11.
iv. Department o f Water Supply and Sanitation DWSS), Government o f Punjab, manages
3,148 schemes and cover 8,300 villages - 85% o fwhich are tubewell based and most o f it
are MV water supply schemes. The remaining 15% draw water from imgation canals.
V. DWSS supplies water through public stand posts and private household connections. The
latter accounts for the bulk o f it. About 50% o f the designed population is being served,
indicating very low efficiency/ utilization.
vi. Interms ofthe delivery levels, 72% ofthe DWSS schemes deliverupto 40 lpcd.
vii. FollowingGOP's decision in2003,858 SV water schemes have been transferred to Gram
Panchayats for operation and maintenance. Of these, 774 were taken over by GPs; 29
returned back; and 749 are actually managed by them. Some 100 schemes are still being
managed by DWSS. This means, the transfer management mechanisms are yet to be
formalized.
viii. The performance o f the GP taken over schemes have been mixed - 319 (nearly 30%)
schemes are fully on their own recovering 100%expenses through user charges, and 219
(25%) recovering nil.The remaining 45% fall inbetween.
ix. About half the rural households possess and use latrines. A third o f them seem to have pit
latrines. Hygienic and safe disposal o f sullage as well as human faeces is a major
problem.
X. Dairying being an important occupation, upkeep o f cattle shed and disposal of animal and
agricultural wastes compound the sanitationproblem inthe rural areas.
useful inassessing the performance and progress o f a nation/ statel district at any given point of time as well as
comparisons over time. The composite ranking i s arrived at by aggregating achievements o n income, education and
health.
17FC: Public Supplies catering 40lpcd and above; PC; Public Supplies catering up to 40 lpcd; andNC: no public
supplies within a reasonable distance
104
xi. Waste water generated by households as well as cattle shed overflow into open surface
drains leading to stagnation inall the lanes and by lanes o f the village. This contaminated
water seeping into the shallow aquifers (handpumps), open dug wells and pipelines has
been very high, with the result, water quality has assumed significance.
I11 PerformanceAssessments
9. DWSS In-house Study. DWSS, GOP undertook a performance evaluation o f 34 best
performing fully covered water supply schemes covering 68 villages, as a part o f the project
preparation. The results have been unique andinstructive.
Low Customer Base - Only 25% o f the households had availed water connections officially. Ths apart, as
highas 33% do draw water from the public supplies, but unofficially, either through standposts or sharing
withneighbors.
Thus, despite availability, over 40% still prefer their ownhandpumps.
0 While Tube Well based schemes account for 30% o f the households in a village, it is quite low (15%) in
canal based schemes. Coverage was particularly lower in MV water supply schemes (being managed by
DWSS).
Swajaldahra. In contrast, schemes covered under GOI's sector reform project (community based
interventions), coverage i s significantly higher (as highas 80%).
Equitable Distribution -Water supplies distribution are highly skewed. Some 20% secure water as high as
15 times the requirement, and the remaining suffer for want o f water.
0 Non-Revenue Water - comprising un-billed authorized consumption (metered non-metered); apparent
losses (unauthorized consumption and metering inaccuracies); and water losses (transmission losses,
leakages and overflows)--works out to as highas 80%.
0 Major reasons for less than expected coverage are: one, cumbersome procedures involved in securing
household connection, and lack o f trust/ reliability insupplies and quality o f service.
10. Pilot Batch Experiences
DWSS had launched a pilot batch in October 2005, covering 5 GPs in each o f the
19districts, for: (i)familiarizing and gaining experience in adopting a demand driven,
decentralized, participatory planningapproach, and (ii) assessing, as well addressing, operational
implications - policy, procedures and humanresources. O f the 95 villages identified for piloting,
45% were N C habitations and the remaining 55% PC habitations. Five non-government support
organizations (SOs) had been deployed to supplement the non-engineering skills o f the DWSS,
and provide community development support to the GPs andvillagers. Out o f 95 villages where
piloting was initiated, 7 got dropped and it i s continuinginthe remaining 88 villages. Of these,
community mobilization (as indicated through capital cost contribution) has been very good in a
little more thanhalfthe villages. Mobilization, however, is yet to commence in8 villages. Onthe
technical front, so far, DSRs have been completed in 54 villages and it i s neming completion in
another 24 villages. Some major experiences drawn from the piloting are presentedbelow.
0 Communi@ ResDonse. Huge response for the program intervention was visible as evident from
endorsement by GramPanchayats for participationand agreeing for the draft rules of engagement.
0 Common/Mutual understanding. A common understanding o f the project rules o f engagement among all
the key stakeholders including communities, engineers and SOs is hghly essential. Adequate and
appropriate capacity buildingand IEC campaigning too are required to ensure that DWSS (public sector)
joins hands with SOs (private sector) and GPs and their representatives (communities) and accomplish the
objective.
Pe$ormance Enhancement. Enhancing operational efficiency in the functioning o f the existing scheme
delivery which may require modest investments was found highly needed. Detailedperformance evaluation
o f existing facilities and rehabilitation needs shouldreceive greater attention.
105
Equitable Distribution. Operational adjustments for ensuring equitable supplies were the need o fthe hour.
Water Oualitv Tests - marketing tool. Demand for DWSS supplies primarily due to poor quality water
from private sources (which seems to have serious adverse impacts on human and cattle health). Towards
making this as a marketing tool, it is essential that water quality tests are done and the results disseminated
widely. Moreover, private water supplies (particularly power driven hand pumps) are becoming too costly
(capital as well as O&M) and program offers a low cost alternative.
Enaineerina Support. Fullfledged participation and extending capacity support by the grassroots engineers
holds the key for success. The engineers need to enmesh with communities and help in undertaking a
diagnostic analysis o f the existing situation, identify issues, offer options and decide on the most
appropriate one.
NABARDSponsoredRWSSEvaluation
11. A gist o f an external evaluation of water supply schemes sponsored by NABARD is
provided to reinforcethe beneficiary assessments.
a Half o f the total household water supply connections belong to higher income group
households with an annual income o fmore than Rs.60000/- .
0 64% o fthe households are satisfied with the quality and quantity o fthe pipedwater
e A third o f the respondents felt that piped water reduced the frequency o f water borne
diseases intheir families.
a Majority o f the households were not aware o f diseases like diahorrea, jaundice, cholera
etc caused by contaminated water.
a A good number of the households felt that the Panchayts are not ina position to take the
O&M responsibility o fthe water supply schemes. The reasons cited are: i)the panchayats
were not involved indifferent stages o f implementationof the scheme inthe past (ii) lack
o f hnds (iii) factional politics (iv) reluctance o f the line department to co-operate and co-
ordinate with the Panchayats and (v) lack o f training andcapacity building.
e 56 per cent o f the total households are also using piped water for cooking, bathing,
washing of clothes, besides drinkingpurposes. Inaddition 30.88% o f the total households
were using the water for toilet and kitchen garden purposes. 13.24% were using for
bathing Cattle and as drinkingwater for Cattle.
a Some households started anew Dairy activities, particularly rearing milch cattle, after
taking water connections. Milk production, with water supply connections, is reported to
have increased inthe households havingcows
IV StakeholderAnalysis
12. Identification o f stakeholders. A stakeholder is defined as an individual or agency who
can either impactedby, and/ or impact on, the project. Impacts could be positive or negative and
the intensity can vary, from high to low. Accordingly a stakeholder is mapped into one o f the
four categories - Positive and High; Negative and High; Positive and Low; and Negative and
Low Impact Groups. From an administrative perspective, stakeholder mapping i s done at
different levels: village, GP, Block, District, State and country. The mapping i s presented below:
LEVEL Stakeholders
Village GramPanchayats - men andwomen members, Villagers -men, women, SCs, poor
andlandless, Households with / without ownsources ofwater andor latrines. Junior
Engineers, Gurudwara Committees
Block Block Panchayat, Block Development Officer, Sub-Divisional Engineers
106
LEVEL Stakeholders
District Zilla Panchayat, District Administration, DRDA, Line Departments, Consultants,
Contractors, NGOs, Suppliers and Traders. DWSS- Executive Engineers, Media
State GOP- Departments o fWSS, Finance, Rural Development and Panchayat Raj,
Irrigation, Ground Water, Power/ Electricity Boards, Agriculture, Science and
Technology, Health and Education, Consultants, NGOs, Citizen Bodies, Professional
Bodies, Suppliers, Media. DWSS- Chief/ Superintendent Engineers
National GOI- RGDWM, DEA;World Bank, NABARD
KevExpectations, Impacts & Issues and Concerns
13. Each stakeholder has an expectation and associated with it are the issues and concerns. A
summary of the same inrespect ofkey stakeholders are presented below:
DWSS: Principal Secretary, Chief Change i s essential to bringinimprovements into service delivery.
Engineers and Superintendent Capital cost contribution by communities could be a major hurdle. Poor,
Engineers SC, other disadvantaged may be left out
Synergy between DWSS staff and GPs need to be designed appropriately.
DWSS - Executive Engineers An excellent welcoming opportunity, but highly skeptical about the
changes.
Work Load will increase many times and quality control could be an issue.
Rehabilitation o f the existing schemes as well as dual supplies should
receive due attention
Objective criteria for the selection o f villages is a must to avoid external
interference
DWSS- SDE/ JEs Ambitious project, tasks are challenging.
N e w demands will be made, capacity buildingrequired.
Explicit instructions providing household connections, billing, etc are
highly essential to improve operational efficiencies.
Appropriate measures to curb illegal connections are to be drawn.
GOP- Rural Development Department Proposed project will be the first ever venture at decentralizing the service
delivery on a significant scale inthe state.
Project could prove to be a vehicle for capacitating and empowering GPs
A proper plan to make use o f the existing technical manpower in the
department needs to be prepared.
Interface between RDD and DWSS o n community sanitation needs to be
viewed seriously.
GOP- Punjab State Council for Project could offer innovative mechanisms for addressing community
Science and Technology / Health sanitation issues.
Department Need to market the project interms of safe water and safe sullage disposal
(including pondrehabilitation) should be high on agenda.
Proper manpower planning should be done and recruitments for JE/ SDE
should be made at appropriate intervals, else state will be wanting for
RWSS expertise.
Sanitation should be a key activity.
Disinfection should receive highpriority.
School sanitation shouldbe integrated into the program.
Media ~ ~~~ Awareness program to curb abuse o f water essential.
Transparency and Accountability measures to be inbuiltinto the program.
Zilla Parishadl Panchayat Samiti Decentralization should be real, not merely on paper.
Objectivity inselection of villages is essential.
Capacity Buildingof Panchayats is critical.
DWSS should be accountable to the users.
Consultation between DWSS and RDD should be regular and agenda
based.
Highcost schemes shouldbe avoided.
Decision making shouldbe faster inthe department.
Community contribution couldbe both inkindand labor
107
Grama Panchayati Community Welcome the intervention from a quality and quantity perspective.
Timely execution and quality are paramount important.
Social Audit is to be designed.
JE (DWSS) job description shouldbe clearly defined.
Electricity Supplies i s a major concern.
Poor and disadvantaged shouldnot be left out.
Household connections manual essential.
Frequent water quality testing is a must.
Choice - water supply vs. sanitation- should be with the communities.
Women Primary clients - suffer the most and program demand emanates from
them.
Skeptical about provision for their participation.
Demand safe water at their door steps
Safe water disposal and pond rehabilitation are very important.
Women headed household needs to be shown due consideration.
Higher service levels essential to take care o f entire domestic requirements
including cattle.
Scheduled Caste Concerned that they may be left out.
Always used to subsidies, and hence contributions will be new.
V PunjabRuralWater Supply andSanitation-Issues
14. Major social development issues that emanate from the beneficiary assessments,
performance assessments and stakeholder analyses are:
The program recognizes that Punjab is quite diverse on socio-economic, geo-physical, and
strategic fronts. Major issues relate to:
i) Diversity-Punjabisquitediverseonmanycounts-socio-economic, geo-physicaland
.
strategic.
ii) Inclusionandequity-Diversitygeneratesseveralsub-groupswithdifferingcapacities.
.
Hence, the project designing should ensure fair and equal opportunities for participation
in, and derive benefits from, the program by all the subgroups, inparticular the poor and
vulnerable such as scheduled caste, women, women headed households, residents of
internationalborder villages.
iii).Decentralization-devolvingthedecisionmakingalongwithcontroloverresourcesto
the local selfgovernments and user groups.
iv). Ownership, Transparency, and accountability - Devolution necessarily have to be
associated with accountability -both downward and upwardwhich i s possible only when
strong sense o f ownership i s developed among the communities.
VI* Customer base and demand generation - Currently, customer base, viz., demand for
public water supplies seem to be quite low. For this to enhance, not only operational
performance has to improve, but also supplementing with efforts at marketing the
program and deriving home the health and hygiene benefits. This means designing an
appropriate IEC campaign to reach stakeholders effectively.
vi). Women Participation - Women are the primary managers of RWSS and hence the
success o f interventions depends upon the provision the program makes for their
participation.
vii). Capacity support/ building - to enable stakeholders perform the desired role. This
includes "Change management", enabling transforming the government department into
a `facilitator' andpromoting partnerships.
108
15. Design elements addressing a majority o f these issues have been dealt in the section on
these issues in Annex-6, Implementation Arrangements. However, the issue o f ownership,
transparency and accountability i s elaborated hereunder.
16. Towards ensuring Ownership, transparency and accountability, every GPWSC will
be enabled to prepare a PRA/SARAR based GP Water & Sanitation Plan (GPWSP). This will
form an attachment to a Memorandum o f Understanding signed by the three principal actors --
GPWSC, GP and DWSS (in the case o f SV schemes) and in addition, SLC, in the case o f MV
water supply schemes. Once approved by signatures, this will not only be the basis for
implementation but also would enable comparative assessments in future. The elements o f such
a planwill include the following Community Action Plans (CAP):
GP Water S u d v and SanitationPlan
(i)Community Mobilization, comprising (a) Social Mobilization details relating to GPWSC formation as well as
opening o f the bank account; and (b) Socioeconomic survey for a social mapping; (c) water sources mapping; and
(d) superimposing social map on water resources map, on a top sheet, to depict the existing situation and identify
gaps (ifany).
(ii) Community Contribution Mobilization plan detailing household-wise cash and labor shares.
(iii)Detailed technical project report (DPR) with details about choices considered and the discussions thereof as
well as the cost particulars related to water supply and drainage improvements.
(iv) Operation and Management (O&M) Plan including the llkely tariff, income and expenses.
(v) Sanitation and Hygiene Promotion -- Enhance people's understanding about pure and safe drinking water and
change the perception o f the people regarding safe dnnking water and sanitation. Enhance personal and social
skills o f the people regarding better handling and storage o f drinkingwater.
(vi) Women Development Initiatives (WDI) will spell out how women have been mobilized, the process o f their
deciding on the choice o f activities; financing mechanism; expected outputs and the SO support.
(vii) Environmental Management Plan. EMP prepared. GP level initiatives for liquid waste management, solid
waste management and remolding o f Ponds, usage o f treated wastewater etc., and provision o f such other
initiatives are to be included.
(viii) Capacity BuildingInitiatives will include the programs planned (class r o o d lecture mode as well as field
based), likely participants, scheduling, SO support implementation arrangements, the post implementation
follow-up.
(ix) Implementation schedule, including schedule for delivery o f inputs and services, schedule for monitoring o f
the progress, success indicators and capacity enhancements.
(x) Community Monitoring. Besides implementation, benefits likely to accrue to different subgroups as well as
to the community as a whole will be monitored by the community. Simple indicators, as identified and
articulated by the community themselves, will be deployed for the purpose.
(xi) Mutual obligations andresponsibilities on the part o f all the three signatories -- GPWSC, GP and DWSS will
be detailed out inresDect o f each o f the activitv inthe scheme cvcle.
17. Inthe case ofMV water supply schemes, there will be two major Plans -one relatedto
the Common Facility (Inter-Village) planandthe other, Intra-Village Plans.
109
Annex 14: EngineeringAspects
INDIA: PunjabRuralWater Supply and SanitationProject
ExistingWater Supply Systems andManagement
1. DWSS o f GoP is incharge o fplanningand implementing Rural Water Supply Schemes and
o f O&M management includingbilling and revenue collection of user charges. Over the past two
years, DWSS has been progressivelytransferring O& Mmanagement responsibility o f SV schemes
to GPs. Inaddition, DWSS is progressively utilizing private sector service contracts for O&M o f SV
andMV schemes.
2 Type of Schemes: Barringthe few villages covered by hand-pumps or dug wells, over 95%
o f the villages covered till date in Punjab have piped water supply, with the source being either
tube-wells or canals. Tube-wells form the main source for rural water supply schemes in Punjab.
About 10 % o f the villages are covered through SV schemes while the balance 90 % villages were
covered by multiple-village schemes.
3 Status o f Water Quality: About 16 percent area of the state mostly in the south-western
districts face water quality problems including 8.5 percent area having shallow aquifer's water
quality totally unfit even for agricultural use. Inthe northern and central districts o f the state, water
available in shallow aquifers is not potable due to its contamination from industrial and irrigation
operations. Majority of the water quality problems in shallow aquifers are due to excess salinity,
fluoride & nitrate content inthe ground water, total dissolved solids or bacteriologicalproblem.
4 Ground water Status: Reports o f Department o f Water Resources and Environment indicate
that the ground water table inPunjab i s falling rapidly and that the quality o f shallow ground water
i s also rapidly changing with over extraction and extensive use o f fertilizers and pesticides.
Discussions were held with Director Water Resources and Environment, Govt. o f Punjab, Central
Ground Water Board (CGWB), Chandigarh, and Director Punjab Remote Sensing Centre, (PRSC)
Ludhiana. Status o f ground water inPunjab that emerged from these discussions is: (i) Irrigation and
most o f the industries are extracting water from shallow unconfined aquifers, (ii) is the only
DWSS
consumer extracting water mostly from deeper confined aquifers; few large irrigation farmers and
Industries are also using tube wells with such extraction, (iii) areas north o f Sutlej river good
In
potential exists inthe deep confined aquifers, (iv) Inareas south of Sutlej river water i s not available
indeep aquifers, (v) water from shallow unconfined aquifers is to be extracted insouthern districts
for water supply also - however the number o f tube wells have to be increased so that the extraction
i s limitedto prevent ingress o f salinity and tube wells have to be dispersed to avoid interference.
5. Disinfection o f Drinking Water: Disinfection facilities are provided for the water supply
schemes and bleaching powder is supplied by DWSS. Review o f Water quality analysis o f samples
collected fiom source and user end for 40 village water supply schemes shows that considerable
number o f samples are showing that the water is bacteriologically affected probably due to lack o f
disinfection. As an alternative to disinfection with bleaching powder, DWSS has assessed the
performance o f silver ionization disinfection plants and based on the assessment about 20 such
plants are so far installed and functioning successfully. DWSS i s closely monitoring the
performance and maintenance o f these plants so as to use them extensively in the project water
supply schemes.
110
6. Water Quality Monitoring: DWSS has a central state laboratory and 4 other testing
laboratories inthe entire state which have been able to test about 1300water samples ina year as
against about 4000 sources. Seven more laboratories are to be set up in near future-with Go1
funding support.
7. Detailed Engineering and preparation o f Cost estimates: DWSS does in house the field
surveys, preparation o f designs and estimates. At present the hydraulic calculations and the
drawings are prepared manually. Design norms followed by DWSS are as follows: (i) design
period 30 years, (ii) design population 150 % o fpresent population with per-capita consumption of
70liters, (iii)
Capacity o f overhead tanks will be worked out at 50 % o f design requirement. (iv) 8
hours o f pumping for SV schemes, (v) 24 hours pumping for MV Canal Based water supply
schemes, (vi) requiredresidual head 7 meters, (vii) single tap public fountain one number for every
250 population, (viii) Minimumsize of 63 mmOD PVC pipes are used for Distribution system.
8. Powers o f Engineers: The cost o f SV water supply scheme i s on an average o f about Rs 25
lakhs. Inview of limitedpowers o f the Executive Engineers andthe SuperintendingEngineers,
invariably all estimates including SV water supply schemes require Technical sanction o f the Chief
Engineer.
9. Inviting Tenders and Award o f Works: As in the case o f technical sanction powers the
power o f the DWSS engineers for award o f works is also limited and hence is leading to delays in
the awardprocess.
10. Contract Packaging: Present practice in DWSS i s to procure centrally and provide to
contractors free o f cost all materials like, pumps, pipes, valves, cement steel etc.
11 Time for PlanningandImplementation: There are substantial time overruns inplanningand
completion of the water supply schemes due to delays in approvals, sanctions, allocation o f funds
and statutory approvals from other departments like forest, Building& roads etc.
12 Performance Assessment o f ExistingSV and MV Schemes: A few o f the rural water supply
systems have become inoperative due to various reasons. DWSS had undertaken a perfonnance
study at supply level for delivery o f quantity o f water at OHSRs o f the villages and at user end
about the service standards regarding the reliability, pressures, quantities and quality o f water as
perceived by the users. A household survey was done in the study area during supply hours to
assess the service standards.
13. Indicators for assessment o f performance inthe Villages / habitations: DWSS has adopted
the following indicators inthe performance study. i)Delivery o f water at OHSR s and availability
o f water at source, ii)whether all households are getting the required quantity, iii)whether the
residual chlorine is present inthe water at consumer end, iv) whether adequate pressure is available
as indicated at the households located inhighest elevation and absence o f pit taps, v) reliability o f
water supply - interruptions and timely supplies, vi) type o f interruptions and duration or time
taken for rectification, vii) position o f power supply, viii) whether GP is self sufficient in O&M ,
ix) whether timely and effective technical support is available to the GP for O&M.
14. Performance o f SV schemes: DWSS has undertaken the performance evaluation including
user end service levels o f about 34 existing SV, MV schemes o f both tube well based and canal
based water supply schemes. Mostly these schemes were selected from best performing fully
covered water supply schemes. The salient conclusions are: (a) sources are generally adequate
111
though acute shortage of power results in unpredictable water supply timings, (b) accounted
coverage of households was 25.2 %, (c) A few households fetch water from their neighbors, (d) few
households have illegal connections, (e) majority of households use water from DWSS taps
provided in common places, (f) unequal distribution of water- some households get water several
times more than their intended service level which results in other households getting far les than
the service level, (8) those who are not using the DWSS water are having their own shallow hand
pumps or submersible pumps though the water is not potable.
15. EngineeringDesirn Issues: The engineering issues (i) present DWSS is not monitoring
At
the water levels and water quality of tube wells developed by them. There i s a need to undertake
Water quality analysis o f all the existing about 4000 sources and proposed about 2000 sources
including bacteriological quality at least once in a year, (ii)Lack of prompt disinfection leading to
considerable number o f water samples showing that the water i s unwholesome. (iii) Arbitrary
location of OHSR and fixing o f reservoir capacity without considering the actual pumping and
supplyhours, leadingto unequal distributiono fwater resultingininadequate pressures and quantity.
(iv) Perpetual shortage of power which affects the pumping hours, (v) Economical designs are not
adopted for pumping main and distribution system, (vi) Need for improving the quality of field
survey, preparation o f designs and drawings, (vii) Structural designs of OHSR s not in conformity
with latest codal provisions for water retaining structures and for seismic and wind loads. (viii)
Absence o f bulk water meters, which leads to inaccurate assessment o f service levels and hence
classification o f coverage as FC, PC etc. (ix) Need for simplification o f procedures in sanctions to
cut down delays in approvals and sanctions o f water supply schemes. (x) Lack o f single contract
responsibilityleading to delays and problems inquality assurance.
ProposedWater SupplySystems andManagement
16 Water Supply Schemes: Apart from usual provisions the project will have the following
specific provisions: (i)Inorder to overcome the power problem, DWSS will carry out cost effective
study on a case to case to basis for provision of diesel generating sets in the canal based schemes
wherever the power supply situation is not adequate and if the community can afford to bear the
O&M expenses o f the same. (ii) ensure prompt disinfection silver inoisation plants will be
To
provided (iii) water meters will be installed in all schemes to enable water audit, (iv) The
Bulk
components for the service improvements and rehabilitation o f existing water Supply schemes may
include augmenting the source, repairs and replacement o f leaking pipes, tanks, repairs o f motors,
disinfection unit, automatic control o f pumping operations, introducing distribution zoning,
extension o f pipelines, fixing o f bulk meters, etc. (v) There is now a limited demand for private
connections (about 25% o fhouseholds); however the project will aim at including coverage o f more
households with individual house connections. Improve their operational performance. The project
will also haveprovision for installation ofpilot defluoridization, reverse osmosis plants etc.
17. Improvements in Detailed Engineering: With a view to enhance the quality o f detailed
engineering, DWSS has startedusing computer oriented procedures for survey, preparation o fplans
anddesigns. Duringproject preparationDWSS has adopted the following improvements indetailed
engineering: (i) Location o f OHSR will be decided to ensure equitable distribution o f water, (ii)
capacity o f OHSR will be decided on the basis o f mass curve to balance the pumping hours and
supplyhours, (iii) Realistic peak factors will be used inthe design o f distribution system to conform
to the actual supply hours, (iv) DWSS has also acquired from the World Bank the Software for
design o f distribution system, (v) DWSS has acquired standard software for design o f Overhead
Service reservoirs (OHSR) conforming to latest BIS requirements for water retaining structures with
112
earth quake resistance & wind loadings and required Concrete proportions. With this software
DWSS has produced typical designs for various capacities o f the OHSR s with various staging
heights. (vi) DWSS has developed in-house software for design o f economical size o f pumping
mains. (iv) DWSS has outsourced survey operations for preparation o f digitized village road maps
for the Pilot batch water supply schemes, (vi) DWSS i s adopting Auto Cad for preparation o f
drawings o fvarious components o f the Pilot batchwater supply schemes.
18. Technical Manual: DWSS has now developed a detailed technical manual covering
design criteria, guidelines on sound engineering practices, standard drawings and cost estimates,
specifications for construction materials, goods, equipment and civil works. The manual contains
among other topics, (i) Computer aided procedures for surveys - preparation o f road maps o f
villages with levels wherever possible linkedto MSL, designs with standard software, drawings
on auto C A D and estimates on excel formats, (ii) Rational approach for fixing capacity of
reservoirs and design o f distribution system, (iii) o f standardsoftware for economical size o f
use
pumping main and distribution system, (iv) type designs for the OHSR is to be in conformity
with the latest BIS codes for RCC and water retaining structures and earth quake andwind loads.
19. District wise Drinking Water Quality and Water Resource maps: DWSS has decided to
acquire data and monitor the changes in water table and water quality in the sources of Water
Supply Schemes with Deep Tube wells and canal based sources. DWSS has outsourced to
Punjab Remote Sensing Centre (PRSC) the work of preparation o f digitized water resource and
quality maps on GIS for each district on an appropriate scale. These maps will indicate habitation
wise location o f DWSS tube wells and show the litho-logical details, depth o f water table, yield
and water quality. A data base will be created for monitoring the tube wells quality and levels.
DWSS with the help o f PRSC will procure the required software and hardware to establish a
water resource and water quality mapping facility for creating and updating the data and
monitoring the water quality andwater levels o f the existing and new tube wells usedby DWSS
20. Capacity Buildinn o f Engineers: The quality o f designs and drawings will be enhanced
and planning time will be saved by adopting total station methods for survey with digitized
village road amps, standard software for hydraulic designs, auto C A D and GIS for preparation o f
plans and estimates. Hence the DWSS engineers will require refresher courses on the use o f the
above tools for survey, design, preparation o f designs, drawings and estimates for the water
supplyschemes.
21 Engineering Support in Planning and Implementation: DWSS has started preparing the
detailed scheme reports for the pilot Batch using the using computer orientedprocedures for survey,
preparation o f plans and designs. DWSS has outsourced the activities o f survey and proposes to
outsource the activities o f finding safe bearing capacity o f OHSR and treatment plant sites and
resistivity surveys for location o f tube well sources. DWSS engineers will prepare the designs and
estimates for pilot batch and will be in charge o f day to day monitoring o f construction quality o f
the project works. Inview o f inadequate staff DWSS will be able to prepare Water Supply Detailed
Scheme Reports (DSRs), designs etc for only about 50% o f villages for further batches. Hence the
project provides for recruitment o f Consultants for providing external Engineering support to the GP
s inplanningandimplementation of water supply Schemes.
22. Procedures for approval and award: DWSS will constitute committees at various levels
which will have full powers to sanction the DSRs and award the works for the project which will
result in cutting down the delays in approvals. DWSS will adopt single contract responsibility for
implementation o f the project works, which will ensure timely completion o f works o f the required
113
quality. All the in village works such as source. development, power pumps overhead tank and
distribution system, will be implemented by the GPWSC adopting the approved bid documents.
However for the commonfacilities o fMV Schemes the normal procedure for estimation, tenders etc
willbe followed by DWSS duly adoptingbank procurement guidelines.
23. Independent Construction Oualitv Surveillance Consultants (ICQSC): DWSS engineers will
assist the GPs in the day to day monitoring o f the works and materials procured by GPs.
Additionally DWSS will retain independentconstruction quality surveillance consultants to monitor
the quality of supervision o f the works and also ensure the quality o f the materials procured and
construction quality o f works. Provision for Independent construction quality surveillance
consultants i s made on the basis that about 25 % o f the total schemes will be selected by the ICQSC
as sample for visits and about 4 visits for each such scheme will be required ina year.
24. Water Oualitv Monitoring and surveillance: In this project a three tier Water Quality
Monitoring and surveillance program will be used for rural water supply schemes. These three tiers
are; state level by DWSS state laboratory, district level through DWSS district laboratory and
Village level through GP. Project will have provision for distribution o f about 4000 test kits and
chloroscopes to all GP s and or schools and habitation Committees. Inview o f the large number o f
water samples (about 100,000 in the project period) to be sampled and analyzed; DWSS apart from
analysis intheir own labs will outsource the work o f sampling and analysis.
25. Independent Water Oualitv Surveillance: The project has made provision for Independent
water quality Surveillance for the following: (i) Water samples from sources o f first ten schemes in
each district will be tested for presence o f pesticides and heavy metals, (ii) subsequent years 100
In
samples ineach year will be tested for presence o f pesticides and heavy metals, (iii)Water quality
sampling ( about 200 samples every year) and analysis in the sources developed in the project for
other parameters ( other thanpesticides andheavy metals)
ProposedCommunitySanitationSchemesandManagement
26. Household sanitation: The rural development department o f GoP is implementing the
provision o f toilets for village households by hnding from GoI. Hence this project will not have
provision for householdtoilets.
27. Status o f Village Sanitation: The wastewater generated from various households overflows
into the open surface drains and i s ultimately disposed into the village ponds, thus making them
highly polluted. Sometimes cow dungalso contributes to the pollution ofponds. Sewage from Toilet
soak pits and effluent from septic tanks also flows into the open drains resulting in stagnant pools
and finally reaches the village ponds. Polluted and clogged open drains are leading to poor
sanitation and unhygienic conditions in the village. The communities are exposed to high risk of
infection due to water borne diseases like cholera, hepatitis, malaria, diarrhea etc. Health risk also
arises where villagers are using their own shallow handpumps and power pumps located near the
ponds or soak pits for drinkingwater.
28. Options Available for village drainage: The options for village drainage are,(i) Open
drainage: provision o f open drains collecting only all water (except septic Tanks effluent) with
connectivity to drain o f f the sullage without any treatment options- since sullage water without
septic tank effluent is amenable to disposal without treatment, (ii) Conventional underground
drainage /sewerage system with sewers andmanholes connected to both toilets and bathrooms o f
houses and led off to a treatment plant for disposal, (iii) Small bore sewerage system which i s
114
designed to receive only the liquidportion o f householdwastewater- connected to the septic tank
or interception chamber which will carry effluent from septic tank/interception chamber (which
retains solids) and led off to a treatment plant for disposal.
29. Perfomance o f Small Bore sewerage systems: The project has provision for providing
sanitation with small bore sewers or conventional sewerage. GoP has already implemented a few
small-bore sewerage schemes with technical support o f the Punjab State Council for Science &
Technology (PSCST). From a field review o f three small bore sewers the observations are: (I)
Investment is required to construct toilets, septic tanks/ Interception chambers inthe household-
cost is increasing due to cost of interception chambers and use o f HDPE Pipes (ii) delay in the
users connecting the bath room and other wastewater, (iii) severe shortage o f power is resulting
instoppage ofsewagepumpingfrom last collectionpoint resulting inback upofsewage and also
non functioning o f aeration devices where provided, (iv) households are not payingpromptly the
O&M cost which is as much as Rs. 50 per household and they may not be able to pay the
enhanced O&M cost if diesel generating set is provided to overcome power shortage (v) village
ponds are used as duckweed and fish ponds, (vi) the difficulty in finding the equipment and the
highcost there o f for de-sludging the filled up septic tanks andinterceptionchambers. There is a
range o ftechnical design and O&M issues that needto be addressed andpiloted before takingup
full-scale implantation o f this component. The project will support proposals for sewerage either
with small-bore sewerageor conventional sewerage as per the option o fthe community.
30. Renovation o f Village Ponds: The existing ponds inthe villages were used to store storm
water run off and catered for the many needs o f the villagers such as swimming, cattle bathing
and a gathering place for the villagers. These ponds also provided an opportunity to charge the
ground water. However over a period o f time, water quality o f these ponds i s deteriorating due
to: (a) indiscriminate discharge o f sullage / sewage, (b) encroachments, (c) run o f f from cattle
dung dumps around the ponds, (d) growth o f aquatic weeds due to nutrient enrichment. The
project has provision for renovation o f about 1000 such ponds and uses them for bio
management o f the village wastewater by using them as duckweed ponds or by construction of
wetland. At present PSCST / DWSS are preparing proposals with use o f the ponds as sewage
treatment pond. Instead, DWSS will also prepare pondrenovation proposals to restore the ponds'
original status for which provisions will include: Dewatering, silt removal, deepening,
partitioning, side bunds, screening chamber, settling tank, plantation, culverts, diversion drains,
repair o f existing street drains leading to the pond (drainage improvements), etc.
115
Annex 15: ProjectPreparationand Supervision
INDIA: PunjabRuralWater Supply and SanitationProject
Planned Actual
PCNreview 05/05/2005
InitialPID to PIC 06/17/2005
Initial ISDS to PIC 06/21/2005
Appraisal 08/17/2006 08/14/2006
Negotiations 09/25/2006 10/24/2006
Board/RVP approval 12/14/2006
Planned date o f effectiveness 0113112007
Planned date o f mid-term review 09/30/2009
Planned closing date 03/31/2012
Key institutions responsible for preparation o f the project:
Borrower:
Government o f India
MinistryofFinance, NewDelhi
Responsible Agency:
Government o f Punjab
D W SS. Chandiearh
Name Title Unit
G.V. Abhyankar Task Team Leader SASEI
S. Satish Sr. Social Dev. Specialist SASES
Meera Mehta Sr. Financial Specialist EWDAF
D.M.Mohan Consultant (Engineering) Consultant
Mohan Gopalakrishnan Sr. Financial Mgt.Specialist SARFM
Tanuj Mathur FinancialMgt. Specialist SARFM
S.K.Bahl Sr. Procurement Specialist SARPS
Sanjay Pahuja Environmental Specialist SASES
Nina Masako Eejima Senior Counsel LEGMS
Sara Gonzalez Flavell Senior Counsel LEGMS
Syed I. Ahmed Lead Counsel LEGMS
KennethMwenda Senior Counsel LEGMS
Thao L e Nguyen Senior Finance Officer LOAG2
Sanjay Srivastava Sr. Environmental Specialist SASES
Smita Misra Sr. Economist SASEI
Mamata Baruah Program Assistant SASEI
Subhash Mittal Financial Mgt.Specialist SARFM
Caroline Van den Berg Peer Reviewer EWDWS
Alexander Bakalian Peer Reviewer MNSIF
~~
Bank funds expended to date on project preparation:
1. Bankresources: US$209,045.46
2. Trust funds: US$229,537.30
3. Total: US$438,582.76
Estimated Approval and Supervision costs:
1. Remainingcosts to approval: US$30,718.62
2. Estimatedannual supervision cost: US$80,000
116
Annex 16: Documentsin the ProjectFile
INDIA: PunjabRuralWater Supply andSanitationProject
GovernmentofIndia/ Governmentof PunjabPolicyDocuments
.. GoI's Swajaldhara, ARWSP and Water Quality MonitoringGuidelines
Relevant GoP Orders
PreparationStudyReports
Baseline assessment ofRWSS coverage
Environmental Assessment Study
Capacity Building
Economic Analysis Study
Institutional design
Communication Strategy
Accounting andAccountability Arrangement inPRIand DWSS
Social Assessment
BankStaffAssessments/ ReferenceDocument
....CAS (Sept. 2004)
PADSfor KarnatakaRWSS 11,KeralaRWSS, UP RWSS, Maharashtra RWSS,
Uttaranchal RWSS
Procurement Capacity Assessment
9 PCN, QER, and Appraisal decision meeting minutes
BankMission's Aide Memoires
...
ProjectImplementationDocuments
Project ImplementationPlan & Operations Manual
Technical Manual
Financial Management Manual
Procurement Manual
117
Annex 17: Statementof Loansand Credits
INDIA: PunjabRuralWater Supply and SanitationProject
Difference between
expected and actual
Original Amount in US$Millions disbursements
Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Ong. Fm. Rev'd
PO97036 2007 OrissaSocio-EconDev Loan I1 150.00 75.00 0.00 0.00 0.00 223.77 -0.38 0.00
PO71160 2007 KamatakaHealthSystems 0.00 141.83 0.00 0.00 0.00 141.61 0.00 0.00
PO75060 2007 RCH I1 0.00 360.00 0.00 0.00 0.00 359.53 0.00 0.00
PO78539 2007 TB I1 0.00 170.00 0.00 0.00 0.00 169.79 0.00 0.00
PO83187 2007 UttaranchalRWSS 0.00 120.00 0.00 0.00 0.00 122.53 0.00 0.00
PO78832 2006 KamatakaPanchayats StrengtheningProj 0.00 120.00 0.00 0.00 0.00 121.43 0.00 0.00
PO79675 2006 Kam Municipal Reform 216.00 0.00 0.00 0.00 0.00 205.00 -5.70 0.00
P079708 2006 TNEmpwr& Pov Reduction 0.00 120.00 0.00 0.00 0.00 111.25 -3.86 0.00
PO83780 2006 TNUrban 111 300.00 0.00 0.00 0.00 0.00 268.54 9.29 0.00
PO93720 2006 Mid-Himalayan(HP) Watersheds 0.00 60.00 0.00 0.00 0.00 54.17 -1.61 0.00
PO92735 2006 NAIP 0.00 200.00 0.00 0.00 0.00 184.58 -18.00 0.00
PO91453 2006 VSBK Cluster Project 0.00 0.00 0.00 0.00 0.00 2.88 0.00 0.00
PO86414 2006 PowerSystemDevelopmentProjectI11 400.00 0.00 0.00 0.00 0.00 400.00 0.00 0.00
PO86518 2005 INSMEFinancing& Development 120.00 0.00 0.00 0.00 0.00 19.40 9.40 0.00
PO84792 2005 AssamAgric Competitiveness 0.00 154.00 0.00 0.00 0.00 142.14 17.37 0.00
PO84632 2005 HydrologyI1 104.98 0.00 0.00 0.00 0.00 104.45 33.11 1.04
PO77977 2005 RuralRoadsProject 99.50 300.00 0.00 0.00 0.00 245.74 -43.50 0.00
PO77856 2005 Lucknow-MuzaffarpurNationalHighway 620.00 0.00 0.00 0.00 0.00 508.01 -21.99 0.00
PO84790 2005 MAHARWSIP 325.00 0.00 0.00 0.00 0.00 292.80 -15.20 0.00
PO75058 2005 TNHEALTH SYSTEMS 0.00 110.83 0.00 0.00 20.06 82.70 12.59 14.60
PO73651 2005 DISEASE SURVEILLANCE 0.00 68.00 0.00 0.00 0.00 61.46 16.97 0.00
PO73370 2005 MadhyaPradesh Water Sector 394.02 0.00 0.00 0.00 0.00 369.43 45.93 0.00
Restructurin
PO94513 2005 India Tsunami ERC 0.00 465.00 0.00 0.00 0.00 397.14 181.94 0.00
PO50655 2004 RAJASTHAN HEALTH SYSTEMS 0.00 89.00 0.00 0.00 0.00 72.95 36.53 0.00
DEVELOPMENT
PO82510 2004 KamatakaUWS ImprovementProject 39.50 0.00 0.00 0.00 0.00 23.61 13.51 0.00
PO79865 2004 GEFBiosafety Project 0.00 0.00 0.00 1.oo 0.00 0.70 0.66 0.00
PO73369 2004 MAHAR RWSS 0.00 181.00 0.00 0.00 0.00 113.01 0.40 0.00
PO78550 2004 Uttar Wtrshed 0.00 69.62 0.00 0.00 0.00 63.63 -0.25 0.00
PO73776 2004 ALLAHABAD BYPASS 240.00 0.00 0.00 0.00 0.00 138.27 71.07 0.00
PO50649 2003 TNROADS 348.00 0.00 0.00 0.00 0.00 260.25 74.95 0.00
PO76467 2003 Chatt DRPP 0.00 112.56 0.00 0.00 20.06 81.28 38.23 0.00
PO67606 2003 UP ROADS 488.00 0.00 0.00 0.00 0.00 319.99 158.54 0.00
PO75056 2003 Food& Drugs CapacityBuilding Project 0.00 54.03 0.00 0.00 0.00 42.65 22.91 0.00
PO71272 2003 AP RURALPOV REDUCTION 0.00 150.03 0.00 0.00 0.00 40.23 5.61 0.00
PO72123 2003 TechiEnggQuality ImprovementProject 0.00 250.00 0.00 0.00 40.11 135.20 39.77 41.31
PO73094 2003 AP CommForestMgmt 0.00 108.00 0.00 0.00 0.00 56.49 1.47 0.00
PO50647 2002 UP WSRP 0.00 149.20 0.00 0.00 40.11 97.21 107.09 0.00
PO71033 2002 U R NTankMgmt 0.00 98.90 0.00 0.00 25.07 59.58 52.50 1.55
PO50653 2002 KARNATAKA RWSS I1 0.00 151.60 0.00 0.00 15.04 76.29 53.36 0.00
PO50668 2002 MUMBAIURBAN TRANSPORT 463.00 79.00 0.00 0.00 0.00 373.87 185.03 0.00
PROJECT
PO74018 2002 GujaratEmergency Earthquake 0.00 442.80 0.00 0.00 80.23 137.31 144.92 17.97
Reconstruct
PO72539 2002 KERALA STATE TRANSPORT 255.00 0.00 0.00 0.00 0.00 128.12 30.12 0.00
118
PO40610 2002 RAJ WSRF' 0.00 140.00 0.00 0.00 15.04 80.07 44.84 0.00
PO69889 2002 MIZORAM ROADS 0.00 60.00 0.00 0.00 0.00 32.01 9.35 0.00
PO10566 2001 Gujarat Highways 381.00 0.00 0.00 0.00 101.00 33.46 134.46 7.63
PO59242 2001 MP DPIP 0.00 110.10 0.00 0.00 20.06 9.84 16.79 -11.28
PO71244 2001 GrandTrunk RoadImprovementProject 589.00 0.00 0.00 0.00 0.00 202.42 202.42 0.00
PO50658 2001 TECHN EDUC I11 0.00 64.90 0.00 0.00 0.00 9.02 2.88 -5.52
PO55455 2001 RajasthanDPEPI1 0.00 74.40 0.00 0.00 0.00 26.15 16.11 0.00
PO55454 2001 KERALA RWSS 0.00 65.50 0.00 0.00 12.27 12.28 12.29 0.97
PO67216 2001 KARWSHD DEVELOPMENT 0.00 100.40 0.00 0.00 20.06 48.06 52.33 35.47
PO70421 2001 KarnatakaHighways 360.00 0.00 0.00 0.00 0.00 66.12 56.12 0.00
PO59501 2000 TA for Econ Reform Project 0.00 45.00 0.00 0.00 12.03 16.81 24.87 2.88
PO50657 2000 UP Health Systems DevelopmentProject 0.00 110.00 0.00 0.00 30.09 34.80 54.77 2.81
PO49770 2000 RENEGY I1 80.00 50.00 0.00 0.00 18.00 36.64 52.84 51.84
PO45049 2000 AP DPIP 0.00 111.00 0.00 0.00 0.00 13.50 5.09 0.00
P010505 2000 RAJASTHAN DPIP 0.00 100.48 0.00 0.00 0.00 40.59 31.42 31.44
PO09972 2000 Natl Highways I11 516.00 0.00 0.00 0.00 0.00 124.98 124.98 64.98
PO50646 1999 UP Sodic Lands I1 0.00 194.10 0.00 0.00 0.00 5.83 2.11 -4.14
Total: 6,489.00 5,626.28 0.00 1.00 469.23 7,601.57 2,096.45 170.93
INDIA
STATEMENT OF IFC's
Held andDisbursedPortfolio
InMillions ofUSDollars
Committed Disbursed
IFC IFC
FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
2005 ADPCL 39.50 7.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 AHEL 0.00 5.08 0.00 0.00 0.00 5.08 0.00 0.00
2005 AP PaperMills 35.00 5.00 0.00 0.00 25.00 5.00 0.00 0.00
2005 APIDC Biotech 0.00 4.00 0.00 0.00 0.00 2.01 0.00 0.00
2002 ATL 13.81 0.00 0.00 9.36 13.81 0.00 0.00 9.36
2003 ATL 1.oo 0.00 0.00 0.00 0.68 0.00 0.00 0.00
2005 ATL 9.39 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 Atul Ltd 16.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2003 BHF 10.30 0.00 10.30 0.00 10.30 0.00 10.30 0.00
2004 BILT 0.00 0.00 15.00 0.00 0.00 0.00 15.00 0.00
2001 BTVL 0.43 3.98 0.00 0.00 0.43 3.98 0.00 0.00
2003 Balrampur 10.52 0.00 0.00 0.00 10.52 0.00 0.00 0.00
2001 Basix Ltd. 0.00 0.98 0.00 0.00 0.00 0.98 0.00 0.00
2005 BharatBiotech 0.00 0.00 4.50 0.00 0.00 0.00 3.30 0.00
1984 Bihar Sponge 5.70 0.00 0.00 0.00 5.70 0.00 0.00 0.00
2003 CCIL 1.50 0.00 0.00 0.00 0.59 0.00 0.00 0.00
2006 CCIL 7.00 2.00 0.00 12.40 7.00 2.00 0.00 12.40
1990 CESC 4.61 0.00 0.00 0.00 4.61 0.00 0.00 0.00
1992 CESC 6.55 0.00 0.00 14.59 6.55 0.00 0.00 14.59
2004 CGL 14.38 0.00 0.00 0.00 7.38 0.00 0.00 0.00
2004 CMScomputers 0.00 10.00 2.50 0.00 0.00 0.00 0.00 0.00
2002 COSMO 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00
119
2005 COSMO 0.00 3.73 0.00 0.00 0.00 3.73 0.00 0.00
2006 ChennaiWater 24.78 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2003 DQEL 0.00 1S O 1S O 0.00 0.00 1.50 1S O 0.00
2005 DSCL 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00
2006 DSCL 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2005 Dabur 0.00 14.09 0.00 0.00 0.00 14.09 0.00 0.00
2003 Dewan 8.68 0.00 0.00 0.00 8.68 0.00 0.00 0.00
2006 FederalBank 0.00 28.06 0.00 0.00 0.00 23.99 0.00 0.00
2001 GTF Fact 0.00 1.20 0.00 0.00 0.00 1.20 0.00 0.00
2006 GTF Fact 0.00 0.00 0.99 0.00 0.00 0.00 0.99 0.00
1994 GVK 0.00 4.83 0.00 0.00 0.00 4.83 0.00 0.00
2003 HDFC 100.00 0.00 0.00 100.00 100.00 0.00 0.00 100.00
1998 IAAF 0.00 0.47 0.00 0.00 0.00 0.30 0.00 0.00
2006 IAL 0.00 9.79 0.00 0.00 0.00 7.70 0.00 0.00
1998 IDFC 0.00 10.82 0.00 0.00 0.00 10.82 0.00 0.00
2005 IDFC 50.00 0.00 0.00 100.00 50.00 0.00 0.00 100.00
IHDC 6.94 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 IHDC 7.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2006 Indecomm 0.00 2.57 0.00 0.00 0.00 2.57 0.00 0.00
1996 India Direct Fnd 0.00 1.10 0.00 0.00 0.00 0.66 0.00 0.00
2001 IndianSeamless 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00
2006 JK Paper 15.00 7.62 0.00 0.00 0.00 7.38 0.00 0.00
2005 KMahindraINDIA 22.00 0.00 0.00 0.00 22.00 0.00 0.00 0.00
2005 KF'IT 11.00 2.50 0.00 0.00 8.00 2.50 0.00 0.00
2003 L&T 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.00
2006 LGB 14.21 4.82 0.00 0.00 0.00 4.82 0.00 0.00
2006 LokFund 0.00 2.00 0.00 0.00 0.00 0.00 0.00 0.00
2002 MMFSL 7.89 0.00 7.51 0.00 7.89 0.00 7.51 0.00
2003 MSSL 0.00 2.29 0.00 0.00 0.00 2.20 0.00 0.00
2001 MahInfra 0.00 10.00 0.00 0.00 0.00 0.79 0.00 0.00
Montalvo 0.00 3.00 0.00 0.00 0.00 1.oa 0.00 0.00
1996 Moser Baer 0.00 0.82 0.00 0.00 0.00 0.82 0.00 0.00
1999 MoserBaer 0.00 8.74 0.00 0.00 0.00 8.74 0.00 0.00
2000 MoserBaer 12.75 10.54 0.00 0.00 12.75 10.54 0.00 0.00
Nevis 0.00 4.00 0.00 0.00 0.00 4.00 0.00 0.00
2003 NewPath 0.00 9.31 0.00 0.00 0.00 8.3 1 0.00 0.00
2004 NewPath 0.00 2.79 0.00 0.00 0.00 2.49 0.00 0.00
2003 Niko Resources 24.44 0.00 0.00 0.00 24.44 0.00 0.00 0.00
2001 Orchid 0.00 0.73 0.00 0.00 0.00 0.73 0.00 0.00
1997 OwensComing 5.92 0.00 0.00 0.00 5.92 0.00 0.00 0.00
2006 PSLLimited 15.00 4.74 0.00 0.00 0.00 4.54 0.00 0.00
2004 Powerlinks 72.98 0.00 0.00 0.00 64.16 0.00 0.00 0.00
2004 RAKIndia 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00
1995 RainCalcining 0.00 2.29 0.00 0.00 0.00 2.29 0.00 0.00
2004 RainCalcining 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00
2005 R a w 3.74 10.28 0.00 0.00 0.00 0.00 0.00 0.00
2005 RuchiSoya 0.00 9.27 0.00 0.00 0.00 6.77 0.00 0.00
2001 SBI 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1997 S E I 3.21 0.00 0.00 0.00 3.21 0.00 0.00 0.00
2000 SREI 6.50 0.00 0.00 0.00 6.50 0.00 0.00 0.00
1995 Sara Fund 0.00 3.43 0.00 0.00 0.00 3.43 0.00 0.00
2004 SeaLion 4.40 0.00 0.00 0.00 4.40 0.00 0.00 0.00
2001 Spryance 0.00 1.86 0.00 0.00 0.00 1.86 0.00 0.00
2003 Spryance 0.00 0.93 0.00 0.00 0.00 0.93 0.00 0.00
2004 SundaramFinance 42.93 0.00 0.00 0.00 42.93 0.00 0.00 0.00
2000 SundaramHome 0.00 2.18 0.00 0.00 0.00 2.18 0.00 0.00
2002 SundaramHome 6.71 0.00 0.00 0.00 6.71 0.00 0.00 0.00
1998 TCW/ICICI 0.00 0.80 0.00 0.00 0.00 0.80 0.00 0.00
2005 TISCO 100.00 0.00 0.00 300.00 0.00 0.00 0.00 0.00
2004 UPL 15.45 0.00 0.00 0.00 15.45 0.00 0.00 0.00
1996 United Riceland 5.63 0.00 0.00 0.00 5.63 0.00 0.00 0.00
2005 United Riceland 8.50 0.00 0.00 0.00 5.00 0.00 0.00 0.00
2002 UshaMartin 0.00 0.72 0.00 0.00 0.00 0.72 0.00 0.00
2001 Vysya Bank 0.00 3.66 0.00 0.00 0.00 3.66 0.00 0.00
2005 Vysya Bank 0.00 3.51 0.00 0.00 0.00 3.51 0.00 0.00
1997 wIV 0.00 0.37 0.00 0.00 0.00 0.37 0.00 0.00
1997 Walden-MgtIndia 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00
2006 iLabs FundI1 0.00 20.00 0.00 0.00 0.00 0.00 0.00 0.00
Total portfolio: 956.52 249.41 42.30 536.35 604.74 175.91 38.60 236.35
ApprovalsPendingCommitment
FY Approval Company Loan Equity Quasi Partic.
2004 CGL 0.01 0.00 0.00 0.00
2000 APCL 0.01 0.00 0.00 0.00
2006 Atul Ltd 0.00 0.01 0.00 0.00
2001 Vysya Bank 0.00 0.00 0.00 0.00
2006 FederalBank 0.01 0.00 0.00 0.00
2001 GI Wind Farms 0.01 0.00 0.00 0.00
2004 Ocean Sparkle 0.00 0.00 0.00 0.00
2005 Allain Duhannan 0.00 0.00 0.00 0.00
Total pendingcommitment: 0.04 0.01 0.00 0.00
121
Annex 18: Country at a Glance
INDIA: Punjab Rural Water Supply and Sanitation Project
POVERTY and SOCIAL South Low-
India Asia income Development diamond'
2005
Population, mid-year(millions) 1094.6 1470 2,353
GNIpercapita (Atlas method, US$) 730 684 580 Lifeexpectancy
1
GNI(Atlas method, US$ billions) 797.9 1005 1364
Average annual growth, 1999-05
Population(Y6 15 17 19
Laborforce (%J 19 2.1 2.3 GNI Gross
per primary
Most recent estimate (latest year available, 1999-05) capita enrollment
Poverty(%ofpopulation belownationalpovertyline) 29
Urban population(%oftotalpopulation) 29 29 31
Lifeexpectancyat birth(years) 63 83 59
Infant mortality(per lOOOlivebirths) 62 88 80
Childmalnutrition ("ofchildrenunder5) 47 45 39 1 Access to improved water source
Access to an improvedwater source (%ofpopulation) 86 84 75
Literacy(%of population age 159 61 60 62
Gross primaryenrollment (%of school-age population) 16 m 04 - lndia
Male PO 16 m
Female -- -- Lowincomegroup
lP 05 99
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1985 1995 2004 2005 Economic ratios.
GDP (US$ billions) 227.2 355.2 694.7 797.6
Gross capitalformation/GDP 23.7 26.5 28.5 311
Exportsof goods and services/GDP 5.4 no 8.5 20.7 Trade
Gross domestic savingslGDP 8.5 25.1 29.1 27.3
Gross nationalsavings/GDP 8.9 26.4 314 29.5
Current account balance/GDP -2.3 -18 -0.7 -13
InterestpaymentslGDP 0.9 14 0.7 07 Domestic Capital
Total debt/GDP 18.0 26.8 8.5 6.1 savings formation
Total debt servicelexports 23.0 27.8 7.5 9.1
Presentvalue of debtlGDP 15.8
Presentvalue of debtlexports 72.7
indebtedness
1985-95 1995-05 2004 2005 2005.09
(averageannualgrolllh)
GDP 5.5 6.0 8.5 8.7 7.4
GDP percapita 3.4 4.3 7.0 7.2 6.0 -India Lowincomegroup
~
Exportsof goods and services 0.9 9.6 8.2 218 6.7
STRUCTURE o f the ECONOMY
1985 1995 2004 2005
(%of GDP) Growth o f capital and GDP (%)
Agriculture 33.7 28.2 8.6 8.0 20
Industry 26.4 28.1 27.3 27.4 M
Manufacturing 6.4 8.1 6.O 25.9
Services 39.9 43.6 53.2 53.8 - -0
Household final consumption expenditure 67.4 63.8 63.5 60.5 -m
Generalgov't finalconsumption expenditure 114 0.8 n 3 P.1
Imports of goods and services 7.8 P.2 217 24.4 -GCF -GDP
1985.95 1995-05 2004 2005
(averageannualgrolllh) Growth o f exports and imports ( O h )
Agriculture 3.5 2.1 0.7 3.9 BO7
Industry 6.5 5.7 8.8 8.7
Manufacturing 6.7 5.4 8.1 9.0
Services 6.7 8.1 9.9 D.0
Household finalconsumption expenditure 5.7 5.6 P.8 4.9
Generalgov't final consumption expenditure 4.2 4.7 0.o 15.6
Gross capitalformation 5.4 6.6 P.8 0.4
Imports of goods and services 9.9 7.0 45.0 22.0
Note:2005 dataare preliminaryestimates.Group dataareto 2004
'Thediamonds showfour keyindicators inthe country(in bold) comparedwith Rs income-groupaverage. If data are missing,thediamond will
be incomplete.
122
India
PRICESand GOVERNMENT FINANCE
1985 1995 2004 2005
I I
Domesticprices Inflation (X)
(% change)
Consumer prices 4.9 10.0 3.9 4.2
Implicit GDP deflator 7.2 9.0 4.2 4.1
Government finance
(% of GDP, includes current grants)
Current revenue 19.2 17.9 19.7 20.8 00 01 02 03 M
Current budget balance -1.7 -3.1 -3.4 -2.8
Overall suruluddeficit -8.8 -6.7 -7.7 -7.5 -GDP deflator +CPI
7
TRADE
1985 1995 2004 2005
(US$ millions) Export and Import levels (US0 mill.)
Total exports (fob) 9,461 32,311 82,150 104.780
Tea 334 1,011 1,440 1,436
Iron 544 1,175 5,079 6,189 150,wO
Manufactures 5,580 23,747 60,731 71,816
Total imports (cif) 17,294 43,670 118,779 156,334 1w,m
Food 1,310 970 3,105 2,681
Fueland energy 4,261 7,526 29,844 43,963 50,wO
Capitalgoods 3,338 10,330 25,135 31,677 0
Exportprice index (2000=100) 100 106 120 130 99 w 01 02 a3 04
Importprice index (2000=100) 115 102 101 115 Exports Imports
T e n s of trade (2000=100) 88 103 119 113
BALANCE of PAYMENTS
1985 1995 2004 2005
(US$ millions) Current account balanceto GDP (%)
Exportsof goods and services 12,777 39,657 128,181 165,390
Importsof noodsand services 19.418 51,213 150,611 194,679
Resourcebalance -6,641 -11,556 -22,430 -29.289
Net income -776 -3,205 -2,669 -5,027
Net currenttransfers 2,207 8,506 20,253 24,095
Current account balance -5,210 -6,255 -4,846 -10,221
Financingitems (net) 4,639 3,319 31,618 24.874
Channes in net reserves 571 2,936 -26,772 -14,653
Memo:
Reserves includinggold (US$ millions) 6,520 21,687 140,076 150,866
Conversion rate (DEC, locaVUS$) 12.2 33.4 44.9 44.3
EXTERNAL DEBT and RESOURCE FLOWS
1985 1995 2004 2005
(US$ mil/ions) Cornposltlon of 2005 debt (US0 mill.)
Total debt outstandingand disbursed 40,952 94,464 121,456 128,446
IBRD 2,396 9,598 4,993 5,652 G:4,819 A 5.652
IDA 9,750 17,409 23,191 23,798
Total debt service 3,531 13,566 11,337 17,510
IBRD 313 1,320 973 1,104
IDA 124 360 785 811
Compositionof net resourceflows
Official grants 349 345 591 181
Official creditors 1,421 -1.048 1,908 1.586
Privatecreditors F 67,955
2.273 1,254 4,271 5,405
Foreinndirect Investment(net inflows) 0 2,057 3,240 5.733
Porlfolio equity (net inflows) 0 2.748 8.907 12,489
Wodd Bank program
Commitments 2,882 2.078 2.886 1,416 A IBRD
- E Bilateral
Disbursements 1,375 2,052 2,966 3,163 B IDA
- D Other multilateral
- F Primte
--
Principal repayments 157 796 1,458 1,516 C- IMF G Short-term
~
Net flows 1,218 1.256 1.508 1.647
Interestpayments 280 884 301 400
Net transfers 938 372 1,207 1,247
DevelopmentEconomics 9/29/06
123
I N D I A
PUNJAB RURAL WATER SUPPLY AND SANITATION PROJECT
RIVERS
TOWNS
STATE CAPITAL
DISTRICT BOUNDARIES
STATE BOUNDARY
INTERNATIONAL BOUNDARIES
74° 75° 76°
This map was produced by the
Map Design Unit of The World Bank.
The boundaries, colors, denominations
and any other information shown on
this map do not imply, on the part of
The World Bank Group, any judgment
on the legal status of any territory, or
any endorsement or acceptance of
such boundaries.
Gurdaspur
Dera Baba
Ramdass Nanak
32° G U R D A S P U R 32°
Qila LalSingh
P A K I S T A N Ajnala
Fatehgarh Batala
Churian
Amritsar Srihargobindpur Tanda
Attari HOSHIARPUR
Jandiala R. Hoshiarpur
A M R I T S A R Beas
Taran Tarn
Kapurthala
KAPURTHALA Jalandhar
Dadwindi THALA Garhshankar
Sultanpur Phagwara
Dala JALANDHAR KAPUR
Nawashahr
Nakodar
Makhu NAWASHAHR
Rahon
Mallanwala Philaur
31° Zira
Dharamkot Rupnagar 31°
R.
Ferozepur Sutlej
Ludhiana R U P N A G A R
L U D H I A N A Siswan
Moga Sanehwal Kurali
Doraha
Dehlon Kharar
R. Chandigarh
Baghapurana Khanna
Faridkot
Sutlej FEROZPUR Raikot FATEHGARH
F A R I D K O T M O G A Landran
Fatehgarh
Kotkapura
Malerkotla Banur
Mukatsar Salabatpura
Jaitu Pakhokey Tepla
Barnala Dhuri P A T I A L A
S A N G R U R Patiala
Goniana Handiaya
M U K T S A R Tappa Dhanaula Bhawanigarh
Badbar
Bathinda Bhucho Sangrur
Malout Longowal
B A T H I N D A
Harisinghwala Sunam
Sitogana Mansa
30°
Dabwali R. 30°
Lehragaga
Budhlada
M A N S A
Ghaggar
Jakahl
Ratia
Sardulgarh 0 10 20 30 40 50
NOVEMBER
KILOMETERS IBRD
35078
2006
74° 75° 76°